FTX Japan Customers Can Withdraw Deposits Via Liquid Japan

FTX Japan, a subsidiary of the now-bankrupt crypto exchange FTX, announced that its customers can now withdraw their cryptocurrency and fiat currency deposits through Liquid Japan.

Japan paused withdrawals last November after FTX's bankruptcy

The announcement comes after FTX Japan paused withdrawals last November following FTX's bankruptcy filing. In the lead up to that, the price of FTX's native cryptocurrency FTT had a steep drop, which triggered a bank run on the exchange. As assets flowed out of the exchange, it was discovered that FTX did not have one-to-one reserves of customer assets, leading to the bankruptcy filing. Much of this was caused by Binance’s CEO CZ spreading fear about the FTX’s reserves.

Eligible FTX Japan customers have been notified about the withdrawal process through email, which includes creating an account with Liquid Japan and confirming the balance of their FTX Japan account.

However, FTX Japan warned that the withdrawal process may become bogged down by a large volume of customer requests. Bloomberg reported that on December 1, 2021, the platform held approximately $94.5 million in crypto and $46 million in fiat currency.

Why Can Japan Withdraw?

This process is able to happen because the Japan subsidiary was sold, and users' funds were kept isolated and safe. Customers of other subsidiaries of FTX, such as FTX.US, remain in limbo as the exchange works its way through bankruptcy proceedings in court.

Certain FTX subsidiaries had different regulatory requirements, and different levels of financial security.  SBF has long claimed that FTX.US was fully collateralized, with all user funds being untouched.