FTX Japan Plans to Return Customer Funds in January

FTX Japan has announced plans to start allowing customers to withdraw their funds from the platform starting as early as 9 January 2023.

Under the proposal, FTX Japan customer balances would be transferred to a platform known as Liquid after a verification process so that users can withdraw their money. FTX acquired the operator of Liquid in February this year to boost its presence in Japan.

FTX Japan currently holds about USD 94.5 million in crypto assets and USD 46 million in fiat currency in designated client accounts.

Japan's FSA (Financial Services Agency) had ordered the Japanese subsidiary to suspend operations and hold all its assets domestically, to ensure they do not flow to foreign affiliates. FTX Japan was also directed to submit plans to the regulator for how it intends to protect users and their holdings.

Under Japanese law, crypto business operators are required to keep users' assets segregated, shielding FTX Japan from the bankruptcy proceedings in the US.

The company said it was able to confirm with the bankruptcy lawyers 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".

It is currently unclear how much investors in FTX in other countries will recover from the bankruptcy.