FTX’s Japanese subsidiary has moved closer to its goal of unlocking its users’ trapped funds.
The bankrupt company told clients on Friday that they can now confirm their balances on the platform, as part of a plan to compensate clients by the end of the month.
A Step Closer to Compensation
Besides viewing their balances, users have been notified that they can migrate their assets to the Japanese crypto exchange platform, Liquid. The firm received $120 million from FTX after a cyberattack in 2021, and was later bought out by the exchange in 2022.
The newly provided access is part of a timeline announced in December that would let clients withdraw their funds from the defunct exchange by the end of the month. In a statement to Bloomberg, Liquid’s Chief Operating Officer Seth Melamed said the team is “confident” that it will “adhere to this timeline, and that client withdrawals will resume “very soon.”
Nevertheless, it cannot open access to user accounts until it receives relevant approvals, as well as sufficient data pertaining to account migration.
“Our team is often times working seven days a week, late nights,” said Melamed. “Re-enabling withdrawals at FTX Japan in a transparent, fair, and accurate manner has been a shared goal for our entire team.”
FTX Japan’s net assets at the end of September totaled roughly 10 billion yen ($74.3 million) at the end of September – a mere fraction of the billions of dollars in assets located at FTX’s main branch last month. Court filings show that at least 41 parties expressed interest in buying out FTX Japan.
The FTX US Debacle
Former FTX CEO Sam Bankman-Fried has long maintained that FTX US is 100% solvent, and could resume withdrawals for customers immediately. By his account, the exclusively American firm held assets separately from FTX International and was thus shielded from certain accounting quirks and asset shortfalls plaguing the main branch.
FTX’s new CEO, John Ray, backed up such claims before congress in December, stating that FTX US accounts were held separately from assets belonging to Alameda Research. Bankman-Fried has been charged with multiple counts of fraud related to comingling his exchange’s assets with those held at the trading desk.
However, FTX’s Office of Unsecured Creditors revealed that $90 million in client assets from FTX US were missing in January. At the time, only $91 million in liquid assets had been placed in cold storage by the firm, compared to $181 million of identified assets.