Bankrupt Crypto Exchange FTX to Start Letting Customers in Japan Withdraw Funds

By Saurabh Singla January 1, 2023363 views

FTX customers in Japan will soon be able to withdraw their funds that are currently frozen due to the bankruptcy process. Two FTX-owned crypto exchanges, FTX Japan and Liquid, are developing a system to allow withdrawals by mid-February.

FTX’s Japanese Customers Can Withdraw Funds Soon

Two FTX-owned cryptocurrency exchanges in Japan — FTX Japan and Liquid — jointly announced Thursday that their users will be able to withdraw funds by mid-February. The two crypto exchanges announced:

For the assets entrusted to us by our customers at FTX Japan and Liquid Japan, we are proceeding with system development so that withdrawals will be possible from the Liquid Japan website.

To withdraw funds, FTX Japan’s customers will need to open an account with Liquid and transfer their assets to the Liquid platform. The exchanges plan to allow withdrawals by mid-February, according to the joint announcement.

Japanese exchange Liquid was acquired by FTX earlier this year. The deal included Quoine Corp., one of the first crypto exchanges to successfully register in 2017 with Japan’s top financial regulator, the Financial Services Agency (FSA).

The acquisition followed a major hack where about $90 million worth of cryptocurrencies were stolen from the Liquid platform. FTX then provided Liquid with $120 million of debt financing at that time.

FTX filed for bankruptcy on Nov. 11. However, FTX Japan said on Dec. 1 that it had confirmed with lawyers for the FTX group that “Japanese customer cash and cryptocurrency should not be part of FTX Japan’s estate given how these assets are held and property interests under Japanese law.”

In November, the FSA issued three orders against FTX Japan: a business suspension order, an order to hold assets domestically, and a business improvement order. The orders followed the exchange abruptly halting customer withdrawals. The following day, FTX filed for bankruptcy in the U.S. The exchange and former CEO Sam Bankman-Fried (SBF) have been charged by the U.S. government and regulators with multiple counts of fraud.

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