FTX Japan Provided An Update On The Plan To Return Client Funds

After establishing that its clients’ assets are not included in FTX’s bankruptcy proceedings, FTX Japan has released a timeline for resumed withdrawals.

On December 1, the company issued a statement indicating that it had been able to confirm that its customers’ assets should not be included in FTX Japan’s estate owing to Japanese legislation requiring crypto exchanges to segregate client cash from their assets.

“This week we were able to confirm with the law firm representing the FTX group in the Chapter 11 bankruptcy proceedings that Japanese customer cash and crypto currency should not be part of FTX Japan’s estate given how these assets are held and property interests under Japanese law,” the company said.

Withdrawals were suspended at FTX Japan on November 8 due to liquidity concerns faced by its parent firm in early November. Since then, the company has said that its priority objective is to re-enable withdrawals, which they hope to complete by the end of 2022.

FTX Japan management is also in constant contact with the Japan Financial Services Agency and the Kanto Financial Bureau regarding the status of re-enabling withdrawal service and the continuing Chapter 11 bankruptcy proceedings in the United States.

The first draft of the plan has been distributed, and more consultations will take place on a regular basis when major milestones are reached.

Due to a lack of regulatory monitoring, banks have been unwilling to work with crypto exchanges; hence FTX is having difficulty obtaining its banking partner to process fiat transactions. The company has addressed this issue by processing Bitcoin exchange transactions through the sister company’s bank account.

The clash between Alameda and FTX over the customer’s fund became the primary source of failure later on. Bankman-Fried asserted that while FTX never gambled with its customers’ money, it did lend it to Alameda. According to reports, the previous CEO stated that Alameda had adequate collateral to support the loans, but most of it was in the FTX native token, FTT.

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Harold

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