The Japanese subsidiary of cryptocurrency exchange FTX is expected to start making withdrawals in February, according to a senior Japanese official.
Mamoru Yanase, deputy director-general of the financial services agency’s Strategy Development and Management Bureau, has said that FTX Japan will start paying back funds to customers from next month. The statement comes after a Delaware bankruptcy judge allowed FTX to sell four business units, including its Japanese subsidiary.
“We are in close contact with FTX Japan,” Yanase reportedly said. ToldAdding that they expect they will “take appropriate steps” on the mid-February deadline for the withdrawal announced by the firm last month.
If the plan goes through successfully, it would be a rare instance of investors getting a portion of their money back after a bankruptcy. In contrast, users of Mt Gox, the world’s largest bitcoin exchange, which filed for bankruptcy protection in 2014, have yet to receive their funds.
“Clients’ assets are properly segregated” by the Japan unit, Yanase said, claiming that technical issues have so far hindered users from accessing their funds. The regulator also said it understands that there is “no objection” to the withdrawal plan with respect to the parent firm’s Chapter 11 filing in the US.
Specifically, John Dorsey, a Delaware bankruptcy judge, allowed FTX to sell its Japanese subsidiary and three other business units, including stock-clearing platform Embed and derivatives arm LedgerX and FTX Europe businesses.
Investment bank Perella Weinberg has now been given permission to start the sale process. The sale notices for FTX Europe and Japan will be published within approximately three business days, with embeds between January 18 and indications of interest received between February 1.
During the hearing, Dorsey characterized the process as FTX “trying to dip its toe in the water to see what happens”. [and] See what kind of interest they get.”
FTX and its group of crypto companies filed for Chapter 11 bankruptcy In early November. Sam Bankman-Fried, disgraced founder of FTX, was arrested later after criminal charges were formally filed against him by US prosecutors in the Bahamas. He was eventually extradited to the US where he was later released from prison posting a $250m bond in a New York court.
The Southern District of New York indicted SBF on eight criminal charges, including wire fraud and conspiracy to embezzle customer funds. Separately, the SEC has accused SBF of “scheming to defraud equity investors in FTX”.
Meanwhile, FTX International has managed to Recovered over $5 billion In cash and liquid assets that can be used to repay creditors.
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