The Japanese subsidiary of the defunct cryptocurrency exchange FTX has unveiled a plan to resume withdrawals, after confirming that its clients’ assets are not part of FTX’s bankruptcy proceedings.
The company provided an update on December 1, stating that it has been able to confirm that its clients’ assets “should not” be part of FTX Japan’s equity due to Japanese regulations. that require cryptocurrency exchanges to separate customer funds from their own assets.
This was according to Landis Rath & Cobb LLP, the law firm representing FTX Group in the Chapter 11 bankruptcy proceeding.
FTX Japan did not go live until June of this year after acquiring Japanese cryptocurrency exchange Liquid 2 in February. Its goal was to serve the Japanese clients of the exchange.
Nevertheless, Due to liquidity problems experienced by its parent company in early November, withdrawals at FTX Japan were suspended on November 8, just like at its parent company.
Days later, the Japan Financial Services Agency announced on November 10 that it had taken administrative action against FTX Japan and ordered it to suspend further business operations.such as accepting new deposits, and fulfilling a business improvement order.
The company was then listed as one of 134 companies that were part of FTX Trading’s Chapter 11 bankruptcy filing. on November 11.
Since then, FTX Japan has stated that its main goal is to re-enable withdrawals. and reportedly aims to do so by the end of 2022.
With the recent confirmation that its users’ assets are not considered part of FTX Japan’s assets, this would effectively provide them with an avenue to resume withdrawals from their users.
“Cash and cryptocurrencies of Japanese customers should not be part of FTX Japan’s assets, given the way these assets are held and ownership interests under Japanese law”the company noted.
FTX Japan said its management is in constant dialogue with Japanese regulators and has submitted the first draft of its plan to resume withdrawals.suggesting that regular inquiries will occur “as key milestones are met.”
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