FTX Japan, the Japanese affiliate of FTX.com, has been ordered to cease operations by Japan's top financial regulator.
Financial watchdog has also asked the cryptocurrency exchange to submit a business action plan by November 16.
Three orders have been issued against the cryptocurrency exchange: a business suspension order, a domestic asset hold order, and a business improvement order. FTX Japan must cease operations from November 10 to December 9, and the exchange cannot accept new assets from clients during that time. The company has also been required by the regulator to present a business development plan by November 16.
As per the FSA announcement, FTX Japan's decision to halt customer withdrawals without specifying a resumption date, while accepting investors' assets and crypto transactions continues, indicates that the exchange lacks the necessary structure to provide crypto exchange services in a manner considered suitable under Japanese standards.
FTX Japan cited its parent company's withdrawal suspension policy. According to the exchange's policy, we have temporarily halted the withdrawal of crypto assets as well as the withdrawal of legal cash, the exchange announced on Wednesday.
In response to the business suspension order, FTX Japan told its users on Thursday that services related to new account opening, spot trading, fiat currency deposits, inbound crypto transfers, and derivatives transactions are halted during the suspension period.
The exchange told clients about the business improvement order: "All employees, including the management team, will take this business improvement order seriously, establish an improvement strategy, and progressively implement it. In addition, we will make a company-wide effort to fully comply with applicable rules and regulations, as well as strengthen our management system, in order to reclaim our customers' trust." FTX Japan announced on Friday (Nov 11) that some Japanese Yen withdrawals have been restarted.
The Japanese regulator's intervention followed the spectacular collapse of Bankman-Fried's crypto empire. He allegedly warned FTX.com investors that his company needs an emergency capital injection or it will have to declare bankruptcy.
The Bahamas Securities Commission has blocked the assets of FTX.com's Bahamian business, while US authorities are looking into the exchange for alleged mismanagement of customer funds.
What are your thoughts on the Japanese financial regulator's move against FTX Japan? Please share your thoughts in the comments box below.
Read also: White House Response To FTX Meltdown, Crypto Crash
