Bankrupt FTX’s Japan unit takes step closer to returning client funds

THE Japanese subsidiary of Sam Bankman-Fried’s failed crypto empire FTX moved a step closer to becoming the first of the group’s businesses to return money to customers.

FTX Japan KK on Friday (Feb 17) notified its clients that they can confirm their account balances at the company and migrate assets to a platform called Liquid, said chief operating officer Seth Melamed in a written interview. The step is part of a plan to start allowing withdrawals as soon as this month, under a timeline announced in December.

“We are confident that we will adhere to the timeline,” Melamed said. Withdrawals for registered clients will resume “very soon,” he said.

Bankman-Fried’s sprawling tangle of FTX group companies slid into a chaotic bankruptcy on Nov 11, leaving more than a million creditors around the world stranded and exacerbating a downturn in the world’s crypto industry. The fallen crypto exchange owes its 50 biggest unsecured creditors a total of US$3.1 billion, according to court filings.

FTX Japan will announce the resumption of withdrawals once it has sufficient data on the balance migration and relevant approvals, Melamed said. In early February, the company began beta testing, collecting feedback and optimizing the process for its remaining 35,000 users, he said.

“Our team is often times working seven days a week, late nights,” Melamed said. “Re-enabling withdrawals at FTX Japan in a transparent, fair, and accurate manner has been a shared goal for our entire team.”

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FTX Japan is up for sale as part of the US bankruptcy process for group companies, drawing interest from at least 41 parties according to a court filing. It had roughly 10 billion yen (S$100 million) in net assets as of the end of September last year, and cash and deposits worth around 17.8 billion yen as of Nov 21, according to its website. BLOOMBERG