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FTX Japan has created systems to refund crypto assets to customers after suspending withdrawals in the previous month.
According to reports, FTX Japan looks to refund customers from February next year following the spectacular FTX crash. In a statement, the exchange’s Japanese subsidiary explained that it is developing a process that facilitates customer recovery of stuck assets.
Local crypto exchange Liquid Japan would be instrumental in this fund recovery phase. FTX had previously acquired Liquid Japan in an undisclosed deal in the spring.
The FTX Japan refund announcement read:
“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 web version.”
Furthermore, the FTX Japanese subsidiary provided customers with a three-step process to recover their crypto assets. This system entails customers opening accounts with Liquid Japan by mid-January and undergoing balance checks. Eventually, those who satisfy all requirements would be eligible for withdrawals which would open in mind-February. According to FTX Japan, withdrawals would occur on Liquid’s webpage or mobile app.
FTX Japan Refund Process Comes 1 Month after Withdrawal Suspension
FTX Japan previously suspended services last month due to its parent company’s bankruptcy filing. However, the subsidiary was never at risk of an insolvency crisis and pledged to create a new system different from FTX’s. At the time, FTX Japan said that its new system would enable its user base to access their funds on its platform. In light of the welcome fund recovery announcement, FTX Japan issued an apology to users for its prior account suspension. The statement read:
“We deeply apologize for the big trouble caused by the prolonged suspension of services for the withdrawal of legal currency as well as crypto assets.”
FTX Japan also stated that it would shut down its operations once all users reclaim their assets. This decision follows a direct order from Kanto Local Finance Bureau for FTX Japan to exit the market by March 2023. FTX Japan had earlier halted some of its services, including withdrawals, on orders from the Financial Services Agency (FSA). In addition, the FSA previously mandated that the Japanese subsidiary retain its assets domestically. The federal regulator also implored FTX Japan to periodically update total liabilities on its balance sheet.
Japan Customers’ Investment Stake Is Not Part of Broader Subsidiary Sale Plans
Earlier in the month, FTX Japan confirmed that its customers’ cash and digital asset stake should not be part of FTX Japan’s estate. Citing the law firm representing FTX’s Chapter 11 bankruptcy proceedings, FTX Japan said:
“The fiat currency and crypto assets of our customers are not included in the assets covered by Chapter 11 after considering the method of depositing and storing these assets and the property rights under the laws of Japan.”
FTX Japan is up for sale alongside three other independently-operated solvent subsidiaries in the US and Europe. New FTX chief executive John Ray III approved the bidding procedures for these subsidiaries via a court motion.