The platform plans to enable customer withdrawals through Liquid Japan, an affiliate exchange.
FTX Japan, the Japanese subsidiary of embattled crypto exchange FTX, has announced plans to return customer assets by re-enabling withdrawals. The announcement comes a few weeks after the exchange revealed that assets on its cold wallets are significantly greater than customer deposits, noting that user funds are safe.
The exchange drew public attention to the recent announcement through its official Twitter handle today.
— FTX Japan (@FTX_JP) December 29, 2022
The announcement reveals a roadmap that eventually concludes with the opening of customer withdrawals through Liquid Japan, a sister exchange. FTX sealed a deal to acquire Liquid Japan and its subsidiaries in March.
According to the roadmap, FTX Japan will email all eligible customers to receive a refund of their funds. The email will contain a link with which they can open an account on Liquid Japan. Customers who already have an account with Liquid Japan are not expected to carry out any task.
Following the Liquid registration, users can transfer their assets on FTX Japan to their Liquid accounts. Afterward, the team will enable Liquid withdrawals so that customers can withdraw their assets through their Liquid accounts.
It bears mentioning that some users will have to undergo Liquid’s unique identity verification processes to activate their newly-created Liquid accounts. The team has promised to notify each customer if the verification procedure is required. According to the announcement, the timeline is liable to change as the company’s external security audit progresses.
FTX Japan’s Unique Case amid the FTX Saga
Recall that FTX Japan was one of the 130+ FTX subsidiaries listed in the Chapter 11 bankruptcy at a U.S. court on November 11. Notwithstanding, three days later, the firm disclosed that user assets are entirely safe, as it holds customer deposits in cold wallets at higher reserve ratios.
Despite this disclosure, customer withdrawals remained closed at FTX Japan, leading users to wonder why they could not take out their assets. FTX Japan’s unique case results from Japanese financial laws, which require that customer deposits are set apart. It bears mentioning that Japanese authorities had given FTX Japan a deadline of March 9, 2023, to seize business operations early this month.