- Customers were asked to verify their account balances before withdrawals could be made.
- FTX Japan filed a strategy for resuming user withdrawals in December 2022.
The Japanese branch of the defunct cryptocurrency exchange FTX apparently has withdrawals scheduled to start for impacted customers as early as the month of February.
Bloomberg reported on February 17 that FTX Japan sent out messages requesting customers to verify their account balances before withdrawals could be made. According to reports, Seth Melamed, the exchange’s COO, indicated that customers may move assets to the FTX-owned Liquid Global platform and that withdrawals would begin “very soon.”
Distinguishing Client Money From Firms
In November 2022, FTX filed for Chapter 11 bankruptcy in the United States. In spite of this, the Financial Services Agency of Japan (FSA) had already asked that FTX Japan halt business orders before the U.S. bankruptcy filing.
In response to the FSA’s directive, FTX Japan filed a strategy for resuming user withdrawals in December 2022. The strategy basically relies on rules that distinguish client money from the firm’s own when arguing that FTX Japan’s customer assets should be excluded from the firm’s bankruptcy proceedings in Japan.
When it shut down in November, FTX Japan reportedly had around 19.6 billion yen in cash or more than $138 million at the time. On the other hand, FTX creditors allegedly recouped almost $5 billion in fiat and cryptocurrency as of January.
The cryptocurrency community was interested in more than just the return of withdrawals. According to Bloomberg, former FTX Director of Engineering and Sam Bankman-Fried associate Nishad Singh is in negotiations with US authorities on entering a guilty plea in the alleged fraud case.