The Japan division of insolvent cryptocurrency startup FTX has a new deadline to recover client assets before closing.
A new deadline for refunding client funds was just issued by the Japanese financial watchdogs.
Uncertainty surrounds the customer funds even as investigations against Sam Bankman-Fried on numerous fronts ramp up. Federal prosecutors recently met with John J. Ray III, the new CEO of FTX, and the firm's bankruptcy attorneys. The beleaguered cryptocurrency exchange filed for chapter 11 bankruptcy about a month ago. On the other hand, the US Securities and Exchanges Commission (SEC) is looking into possible misuse of user funds from FTX US.
The Japanese financial watchdogs recently announced a new deadline for refunding customer payments. The order for FTX Japan's operations to be suspended was extended on Friday by the nation's Kanto Local Finance Bureau. Due to the pending return of user assets, the agency decided to extend the deadline by three months. FTX Japan was supposed to be shut down on December 9, however the agency changed it to March 9, 2023.
More significantly, the regulatory body saw that FTX was unable to restore cryptocurrency assets within the required timeframe. This indicates that the liquidity situation is still present, both at the main FTX cryptocurrency exchange and in the Japan branch. The business claimed in a recent bankruptcy petition that it owed its top 50 creditors close to $3 billion. Along with this, FTX has assets owned by millions of small retail investors.
The Japanese agency also reported that trading at FTX Japan is still halted. A Reuters article states that the exchange is not yet prepared to conduct operations. On Friday, the price of the FTX Token (FTT) considerably increased.
