Japan’s Financial Services Agency on Wednesday said it plans to extend the suspension order for crypto exchange FTX Japan. The move comes as Japanese arm is taking more time to resume withdrawals and return customer funds. The FSA in November ordered FTX Japan to suspend operations such as accepting new customers, and work on resuming withdrawals.
FTX Japan To Delay Returning of Customer Funds
Japan’s Financial Services Agency plans to extend FTX Japan suspension order based on the Payment Services Act and the Financial Instruments and Exchange Act beyond December 9.
FTX Trading’s Japanese subsidiary is still unable to resume withdrawals and taking more time to return customer funds, reported Nikkei on December 7. Moreover, it’s unclear if the firm plans to return customer funds soon.
On November 10, Japan’s FSA ordered FTX Japan to suspend operations after it suspended crypto asset withdrawals. Crypto exchange FTX faced liquidity issues after a massive selloff of FTX Token (FTT) due to misappropriating customer funds with sister firm Alameda. It led to FTX halting withdrawals for an indefinite period.
However, FTX Japan has announced returning customer funds as the assets are unaffected by FTX bankruptcy. The crypto exchange looks to restart withdrawals after confirmation from bankruptcy lawyers in the U.S. The crypto assets in the Japanese subsidiary are held under Japanese law. Thus, it can be returned to customers after a security audit, incorporating controls, reconciliation, and reviews.
FTX Japan executive earlier claimed that a separate withdrawal system is under development to resume withdrawals for customers by the end of this year. The Japanese arm reportedly has around 19.6 billion yen ($138 million) in deposits as of November 10.
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