FTX Japan says work is underway to enable withdrawal of client funds

(Bloomberg) – The Japanese subsidiary of bankrupt crypto empire FTX said it was working to allow users in the country to withdraw their funds, paving the way for a rare case of investors recovering money from the collapse of the exchange.

The plan to resume withdrawal services, which were first suspended on Nov. 8, has been approved by FTX Trading’s new management team, according to an update posted on its website on Thursday. As part of the plan, the company incorporates controls, security audit, reconciliations and reviews.

Sam Bankman-Fried’s sprawling tangle of FTX Group companies descended into a chaotic bankruptcy on Nov. 11, potentially defrauding more than a million creditors worldwide and fomenting unrest in the crypto industry. In Japan, the financial regulator has been seeking a roadmap and timetable for returning client assets as soon as possible, Bloomberg News reported this week.

FTX Japan customer balances would be transferred to Liquid, a platform it bought this year to boost its local presence, after a verification process so users could withdraw their money, people familiar with the matter had said. . FTX Japan KK currently holds approximately $94.5 million in crypto assets and $46 million in fiat currency in designated client accounts.

FTX Japan said it confirmed with the law firm representing the FTX Group in the Chapter 11 bankruptcy proceedings that cash and cryptocurrency from Japanese clients should not be part of FTX Japan’s estate. The local unit plans to resume withdrawal service in the normal course on this basis, according to the statement.

FTX Japan management maintains regular dialogue with regulators in the country and has shared the first draft of the plan with more regular consultation as key milestones are reached, according to the statement. Private keys to separate asset wallets are kept offline at all times and are solely under the control of the operations team in Japan, he added.

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