FTX's Japanese subsidiary is one step closer to unlocking users' trapped funds.
The bankrupt company told customers on Friday that they can now confirm balances on the platform as part of a plan to compensate customers by the end of the month. In addition to checking their balances, users were told they could migrate their holdings to Liquid, a Japanese cryptocurrency exchange. The company received $120 million from FTX after a cyber attack in 2021 before being acquired by the exchange in 2022.
The newly provided access is part of a schedule announced in December that will allow customers to withdraw funds from the defunct exchange by the end of the month. In a statement to Bloomberg, Liquid’s COO Seth Melamed said the team is “confident” it will “adhere to this timeline and that customer withdrawals will resume” soon.
Still, it cannot open access to user accounts until it has the relevant approvals and enough data related to the account migration. FTX Japan’s net assets totaled about 10 billion yen ($74.3 million) as of the end of September, a fraction of the billions in assets of FTX’s main affiliates last month. At least 41 parties have expressed interest in acquiring FTX Japan, according to court documents.
Former FTX CEO Sam Bankman-Fried has long maintained that FTX US is 100% solvent and can immediately resume customer withdrawals. According to him, the wholly US-owned assets are separate from FTX International and thus immune to some of the accounting quirks and asset shortfalls that plague major affiliates.
FTX's new chief executive, John Ray, backed up such claims in Congress in December, saying the FTX US account was held separately from assets belonging to Alameda Research. Bankman-Fried was charged with multiple counts of fraud related to commingling assets on its exchanges with assets held on trading desks.
However, FTX’s Office of Unsecured Creditors revealed that in January FTX US lost $90 million in client assets. At the time, the company had only $91 million in liquid assets in cold storage, compared to $181 million in recognized assets.
