Japanese Government: We’ll Take ‘All Possible Measures’ to Help FTX Japan Customers

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Tim Alper

Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023 06:53 EDT

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The Japanese government has vowed that it will do all it can to protect customers of FTX’s Japanese subsidiary, FTX Japan. But the exchange has announced that its clients’ funds are safe.

Nikkei quoted the nation’s Finance Minister Shunichi Suzuki as explaining that regulators had hit FTX Japan with a business suspension order, but that the government was taking steps to help the exchange’s customers.

Suzuki was speaking at a press conference held after a cabinet meeting, where he said:

“We need to take all possible measures to ensure that the interests of [FTX Japan] users are not harmed.”

The regulatory Financial Services Agency (FSA) reacted to the collapse of FTX Japan’s parent company, FTX, by issuing the exchange with a business suspension order. FTX Japan has also been ordered to submit a business improvement plan by November 16.

While FTX Japan did not initially halt all transactions on its platform, it did follow suit with FTX’s decision to halt customer withdrawals.

The FSA stepped in with its order shortly after. The agency castigated FTX Japan for failing to “specify a schedule” for the resumption of withdrawals.

But FTX Japan has responded by announcing on its website that its customers funds are safe. The company wrote that it “manages customer assets separately” in accordance with the “strict rules stipulated by the FSA and Japanese law.” It claimed that it has access to an “amount that exceeds” the value of total customers’ assets in custody on cold wallets and trust bank accounts.

While the firm again refused to state when it would resume customer withdrawals, it published a breakdown of its own finances – and the coins held by its customers. The company wrote that it had net assets worth $72.6 million and was holding $140.2 million worth of customers’ coins and fiat in cold wallets.

FTX Japan: Are Customer Assets Safe?

In an earlier post, FTX Japan stated that the FTX Chapter 11 bankruptcy application filed in the United States “also included FTX Japan,” but again insisted:

“In accordance with Japanese laws and industry regulations, the assets entrusted to us by our customers are strictly segregated and managed, with cryptoassets held in cold wallets and fiat currencies held in trust accounts.”

FTX Japan added that it would “inform” customers “on the status of system restoration” of its platform in due course – although it appears that legal matters in the United States may yet slow the process significantly.