FTX Japan confirmed plans to begin returning customer assets in February of next year in a statement issued on Thursday.
Customers who want to withdraw their lost funds must first open an account with Liquid Japan. Withdrawals will begin in mid-February after individual balances have been checked. The process, however, may be delayed “depending on the progress of the external security audit.”
Customers will open Liquid Japan accounts in three stages, beginning with balance checks in mid-January and ending with withdrawals in mid-February. Customers of FTX Japan will be among the first to receive their lost funds after the exchange prevented more than one million customers from accessing assets worth an estimated $8 billion. FTX is the owner and operator of Liquid Japan.
According to FTX Japan’s lawyers in the United States, Japanese customers’ funds “should not be part of FTX Japan’s estate given how these assets are held and property interests under Japanese law.” This means that FTX’s Japanese assets will be unaffected by the Chapter 11 bankruptcy proceedings in the United States.
“We deeply apologize for the big trouble caused by the prolonged suspension of services for the withdrawal of legal currency as well as crypto assets,” FTX Japan said in a statement.
Customers in Japan were unable to withdraw funds from their accounts after local financial regulators ordered the exchange to halt operations. Three days later, FTX’s global arm filed for Chapter 11 bankruptcy in the United States.
On December 12, the exchange’s founder and CEO were arrested in the Bahamas. Since then, the Bahamas Securities and Exchange Commission has taken control of over $3.5 billion in assets. The assets are apparently being held by the authorities until they can be returned to creditors and former customers.
According to a list of FTX’s top 50 unsecured creditors, the now-bankrupt company owed more than $3 billion. According to reports, the largest unsecured creditor is owed $226 million. FTX owes more than $203 million to its second-largest creditor.