FTX Japan Set to Begin Returning Customer Funds in February

In a statement released Thursday, FTX Japan confirmed plans to begin returning customer assets by February next year.

Customers looking to withdraw their lost funds will have to open accounts with Liquid Japan. Once individual balances have been checked, withdrawals will begin in mid-February. However, the process could be delayed “depending on the progress of the external security audit.”

A three-step process will see customers open Liquid Japan accounts by mid-January, followed by balance checks and the opening of withdrawals in mid-February. FTX Japan customers will be among the first to receive their lost funds after the exchange left more than one million customers unable to access assets worth an estimated $8bn. Liquid Japan is owned and controlled by FTX.

FTX Japan has confirmed with its U.S. lawyers that Japanese customers’ funds “should not be part of FTX Japan’s estate given how these assets are held and property interests under Japanese law.” This means all Japanese assets will remain untouched by FTX’s U.S. Chapter 11 bankruptcy proceedings.

In a statement, FTX Japan said: “We deeply apologize for the big trouble caused by the prolonged suspension of services for the withdrawal of legal currency as well as crypto assets.”

FTX Collapse Left Billions Owed

Japanese customers were unable to withdraw funds from their accounts after local financial regulators ordered the exchange to suspend services. The global arm of FTX filed for Chapter 11 bankruptcy in the U.S. three days after.

The exchange’s founder and CEO was arrested in the Bahamas on December 12. Since then, the Bahamian securities regulator has taken control of over $3.5 billion in assets. The authorities are apparently holding the assets until they can be returned to creditors and former customers

A list of FTX’s top 50 unsecured creditors showed that the now-bankrupt firm owed over $3 billion. The largest unsecured creditor is reportedly owed $226 million. FTX has a debt of over $203 million to the second-biggest creditor.