After halting withdrawals and suspending operations two weeks ago, FTX Japan is reportedly planning to resume withdrawals by the end of 2022.
FTX Japan is the Japanese subsidiary of Sam Bankman-Fried’s FTX exchange. It halted withdrawals two weeks ago as SBF’s house of cards collapsed. Shortly after, the Japanese financial watchdog, the Financial Services Agency (FSA), ordered the exchange to suspend operations until December 9. It also ordered it to hold all its assets locally to prevent any contagion with its global parent.
According to one local outlet, FTX users in Japan could be getting a reprieve even as the global parent company sinks deeper into its liquidity crisis. NHK reports that FTX Japan is preparing to resume its withdrawals by the end of the year.
Executives at FTX Japan reportedly told the outlet that the reason for the suspension of withdrawals isn’t contagion with SBF’s activities or loss of funds. Instead, it’s down to the Japanese entity using the same system as FTX.
FTX Japan is now setting up its own systems so customers can withdraw their digital assets. The entity claimed to have JPY19.6 billion ($140 million) in cash and deposits as of November 10, just before halting withdrawals.
FTX Japan is reportedly being considered for sale as part of the bankruptcy process of its parent company. Nikkei Asia reported this week that the Japanese unit’s solvent balance sheet makes it one of SBF’s prized assets, alongside FTX EU, the European subsidiary. FTX Japan was also one of SBF’s best-performing units, with Japan being FTX’s second-biggest market after South Korea.
Nikkei further reported that at least one buyer had approached FTX Japan through an investment bank.
“An acquisition for the entire Japanese business would be close to an ideal solution,” one unnamed FSA official told the publication.
“If there is a global scramble for assets, the wealth of assets in Japan will be targeted. A sale would be a positive development, depending on the terms of the deal,” another one quipped.
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