Will FTX Japan Depositors Actually Receive Their Funds in February?

According to a senior Japanese official, the FTX subsidiary in Japan is anticipated to commence withdrawals in February.

The deputy director-general of the Financial Services Agency’s Strategy Development and Management Bureau, Mamoru Yanase, has stated that FTX Japan will begin refunding customer funds beginning next month. The declaration was made after a bankruptcy judge in Delaware permitted FTX to sell four business divisions, including its Japanese affiliate.

“We have been in regular contact with FTX Japan,” Yanase is alleged to have stated, adding that they expect to “take the appropriate procedures” in accordance with a mid-February deadline for withdrawals established by the company last month.
If the idea is implemented, it would be an uncommon occurrence for investors to receive a percentage of their assets back after a bankruptcy. In contrast, users of the once-largest bitcoin exchange in the world, Mt. Gox, which filed for bankruptcy in 2014, have yet to collect their funds.

“Client assets have been properly segregated” by the Japan unit, according to Yanase, who claimed that technological challenges have prevented consumers from accessing their funds to date. The regulator also stated that, to its knowledge, there have been “no objections whatsoever” to the withdrawal plan in relation to the parent company’s Chapter 11 petition in the United States.

Notably, Delaware bankruptcy judge John Dorsey permitted FTX to sell its Japanese company and three other business divisions, including the stock-clearing platform Embed, the derivatives arm LedgerX, and the FTX Europe operations.

The investment bank Perella Weinberg may now initiate the sale procedure. Sale notices will be published within three business days, and indications of interest will be accepted between January 18 and February 1 for FTX Europe and Japan.

During the hearing, Dorsey described the process as FTX “dipping their toes in the water to see what happens” and to gauge the level of interest in the company.

At the beginning of November, FTX and its group of cryptocurrency companies filed for Chapter 11 bankruptcy. Sam Bankman-Fried, the disgraced founder of FTX, was apprehended in The Bahamas after US prosecutors filed official criminal charges against him. He was later extradited to the United States, where he posted a $250 million bond and was released from jail by a New York court.

The Southern District of New York has filed eight criminal allegations against SBF, including wire fraud and conspiracy through misusing customer cash. Separately, the SEC has charged SBF with “executing a conspiracy to defraud FTX shareholders.”

FTX International has recovered nearly $5 billion in cash and liquid assets that can be utilized to repay creditors.

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