The Japanese subsidiary of cryptocurrency exchange FTX is expected to resume withdrawals starting in February, according to a Japanese senior official.
Mamoru Yanase, deputy director-general of the Financial Services Agency’s Strategy Development and Management Bureau, has said FTX Japan will repay funds to customers starting next month. The statement comes after a Delaware bankruptcy Judge allowed FTX to sell four business units, including its Japanese subsidiary.
“We have been in close communication with FTX Japan,” Yanase reportedly said, adding that they expect they “will properly take steps based” on a mid-February timeline for withdrawals announced last month by the firm.
If the plan goes through successfully, it would be a rare example of investors getting a portion of their funds back following the bankruptcy. In contrast, users of Mt. Gox, once the world’s biggest bitcoin exchange, which filed for bankruptcy protection back in 2014, have not received their funds yet.
“Clients assets have been properly segregated” by the Japan unit, Yanase said, claiming that technical issues have so far hindered users from access to their funds. The regulator also said it understands that there has been “no objection at all” to the withdrawal plan with regard to the parent firm’s Chapter 11 filing in the US.
Notably, John Dorsey, a Delaware bankruptcy Judge, allowed FTX to sell its Japanese subsidiary and three other business units, including include the stock-clearing platform Embed and the derivatives arm LedgerX and FTX Europe businesses.
Investment bank Perella Weinberg is now allowed to start the sale process. Sale notices will be published within around three business days, with indications of interest to be received between Jan. 18 for Embed and Feb. 1 for FTX Europe and Japan.
During the hearing, Dorsey characterized the process as FTX “trying to dip their toe into the water to see what happens [and] see what kind of interest they receive.”
FTX and its group of crypto companies filed for Chapter 11 bankruptcy in early November. Sam Bankman-Fried, the disgraced founder of FTX, was later arrested in The Bahamas after US prosecutors formally filed criminal charges against him. He was eventually extradited to the US where he was released from jail after posting a $250m bond in a New York court.
The Southern District of New York has charged SBF with eight criminal charges including wire fraud and conspiracy by misusing customer funds. Separately, the SEC has charged SBF with “orchestrating a scheme to defraud equity investors in FTX.”
Meanwhile, FTX International has so far managed to recover over $5 billion in cash and liquid assets that may be used to repay creditors.