FTX is back in Japan, where users can withdraw fiat and crypto
System back online with money still there, thanks to Japanese regulations
FTX's Japan outpost announced on Monday it would once again allow withdraw of both fiat and crypto assets, beginning at noon local time on Tuesday.
Customers must have or open a Liquid Japan account to transfer assets. Liquid Japan is a crypto trading platform acquired by FTX in February 2022.
The announcement makes good on a January promise to allow the withdraw of assets this month.
Japanese customers of failed crypto exchange FTX are the first to have the chance to access their assets following the company’s spectacular crash.
Japan's comprehensively regulated cryptocurrency sector is the reason they're able to do so: the country’s laws require crypto exchange companies to register with the Financial Services Agency, demonstrate anti-money laundering laws, set aside capital reserves, and separate customer and exchange assets.
However the sudden collapse of FTX saw the Japanese operation's employees lose access to the systems required to distribute the funds.
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FTX Japan has posted weekly updates advising of its asset holdings, apologising for its systems being offline, and promising to restore service.
That promise has now been fulfilled, although tweets such as this one suggest that while withdrawals are possible, transaction history records may be incomplete.
Prior to filing for bankruptcy in November, FTX promoted itself as a safe and secure crypto investment service. At one point the company was valued at $32 billion.
The company’s downfall came after it secretly transferred – or loaned- around $10 billion in customer funds to related entity Alameda Research, which blew the dough while trying to defend some tricky trading positions.
The two companies, Alameda Research and FTX, were supposed to have been operated separately.
Founder Sam Bankman-Fried, by this time residing in the Bahamas, was eventually arrested. He has since pleaded not guilty on eight criminal charges related to wire fraud, money laundering, violating campaign finance laws and more. He is scheduled to stand trial in October.
Bankman-Fried’s spokesman reportedly said the founder was “happy to see that the Japanese exchange is moving forward, and continues to maintain that the US entity can and should do the same as soon as possible.”
Japan’s ability to protect its consumers from huge losses could serve as a template for other nations looking to protect its citizens and economy.
India's finance minister Nirmala Sitharaman said in October 2022 the nation would use its role in the G20 group of nations to push for multilateral regulations of cryptocurrency while the Monetary Authority of Singapore (MAS) has promised to be “brutal and unrelentingly hard” on dodgy industry players.
This week, Hong Kong has proposed regulations to hold virtual asset platform operators to the same legal standards as security brokers and automated trading venues. ®