FTX unit in Japan becomes first to resume customer withdrawals

The Japanese subsidiary of Sam Bankman-Fried’s failed crypto exchange plans to reopen withdrawals on Tuesday, making itself the first of the FTX group’s businesses to return money to clients.

FTX Japan K.K. will start allowing customers to withdraw their fiat and crypto funds at noon in Tokyo, it said in a statement.

FTX slid into a chaotic bankruptcy on November 11, leaving more than a million creditors around the world stranded and exacerbating a downturn in the world’s crypto industry.

Co-founder Bankman-Fried has pleaded not guilty to fraud charges ahead of a US trial.

Bankman-Fried is “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,” his spokesperson Mark Botnick said by email.

The resumption of withdrawals could mark a victory for Japan’s financial regulator, which has moved quickly to put in place strict rules to protect clients, including the segregation of assets. Japan has been calling on its international counterparts to oversee crypto as strictly as they do commercial banks.

FTX Japan may need time to process withdrawals if a large number of requests flow in from customers, according to the statement. Clients can pull their assets from a platform called Liquid.

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 ($74 million) in net assets at the end of September, and cash and deposits worth around 17.8 billion yen as of November 21, according to its website.