On December 29, the Japanese branch of FTX revealed intentions to return users’ assets in a blog post. The cryptocurrency exchange released a plan to assist consumers in retrieving their funds through direct withdrawal via Liquid, a sister crypto exchange operated by FTX.
The news comes only a few weeks after the Japanese arm of FTX revealed that customers’ funds are secure in a cold wallet. FTX Japan is prepared to repay users’ funds through the liquid exchange. A section of the plan said that consumers would get emails helping them through the withdrawal procedure.
Users who do not have a Liquid account will get an email with a signup link. After registration, customers can withdraw cash from FTX Japan to their Liquid accounts. Moreover, after purchasing a local exchange, Liquid, in February, FTX entered the Japanese market to offer crypto services in June. Following FTX’s Chapter 11 bankruptcy filing, Liquid banned money withdrawals from its platform.
— FTX Japan (@FTX_JP) December 29, 2022
Proper regulation protected Japanese FTX users from SBF’s mismanagement. Users of FTX Japan will have access to their funds because of the particular protection afforded by Japanese financial laws. Japanese Financial Law requires bitcoin exchanges to segregate client deposits.
Amid the FTX crisis, the Japan Financial Services Agency ordered FTX Japan to halt commercial operations. Despite restricting withdrawals, FTX’s Japanese business argued that the funds on its cold wallet exceed the assets in its control.
As a result, consumers of the bitcoin exchange in Japan were immune to the mishandling of assets by FTX’s previous CEO, Sam Bankman-Fried. The new development emphasizes why authorities worldwide must create clear policies that safeguard consumers.