Japanese Regulator Slaps FTX Japan With Business Suspension Order – The Japanese Financial Services Agency (FSA) said that FTX Japan, the country’s branch of Sam Bankman-Fried’s embattled cryptocurrency exchange FTX.com, has been subject to enforcement action by the Kanto Local Finance Bureau. An order to hold assets domestically, a business improvement order, and a business suspension order have all been issued against the cryptocurrency exchange. From November 10 to December 9, FTX Japan must cease operations, and the exchange is unable to take new assets from clients during that time.
The company must also submit a business development plan by November 16 as per the regulator’s other directive. According to the FSA announcement, FTX Japan’s decision to stop customer withdrawals without a timetable for resumption processing while continuing to accept investors’ assets and process cryptocurrency transactions indicates that the exchange lacks the necessary infrastructure to offer crypto exchange services in a way that is acceptable by Japanese standards.
FTX Japan cited its parent company’s policy for withdrawal suspension. “In accordance with the policy of the head office, we have temporarily suspended the withdrawal of crypto assets and the withdrawal of legal currency,” the exchange said Wednesday. In response to the business suspension order, FTX Japan told its users on Thursday that services connected to new account opening, spot trading, deposits in fiat currency, inbound crypto transfers, and derivatives transactions are suspended during the suspension period.
Regarding the business improvement order, the exchange informed customers: “All employees, including the management team, will take this business improvement order seriously, formulate an improvement plan, and steadily implement it. In addition, we will make a company-wide effort to thoroughly comply with relevant laws and regulations and further strengthen our management system in an effort to regain the trust of our customers.” On Friday, FTX Japan announced that some Japanese yen withdrawals have resumed.
The action taken by the Japanese regulator followed the dramatic downfall of Bankman-Fried’s crypto empire. He reportedly told FTX.com investors that his company needs an emergency cash injection or it may have to file for bankruptcy. The assets of FTX.com’s Bahamian subsidiary have been frozen by the Bahamas Securities Commission, and US officials are looking into the exchange over allegations that it mishandled customer funds.
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