FTX Japan ordered by country’s financial regulator to suspend operations

Japan’s financial regulators have ordered FTX’s Japan arm to suspend operations in the country. 

Citing FTX Japan’s suspension of crypto withdrawals, the Financial Services Agency (FSA) has designated it an entity lacking the infrastructure to carry out financial activities.

In particular, it has ordered FTX Japan to cease business operations and to hold assets in Japan equivalent to the liabilities on its balance sheet until Dec. 9. 

“It is necessary to take all possible measures to ensure that this does not lead to a situation where the company’s assets flow to foreign affiliates, etc. and the interests of creditors and investors are harmed,” said today’s announcement. 

The FSA also outlined a “business improvement plan” that must identify and protect FTX users and their holdings, ensuring the preservation of those assets and that users are correctly informed.

The regulator has ordered that the plan be submitted by Nov. 16, with an update on its progress and implementation on Dec. 10. 

On Tuesday, FTX’s international exchange halted withdrawals amid a liquidity crisis. The same day, FTX said it had agreed to be acquired by rival Binance. On Wednesday, after Binance reviewed FTX’s financials, the acquisition fell through. 

In events that followed, other regulators have weighed in on the crisis surrounding the company, including the U.S., with Gary Gensler today warning investors to “be careful.” 

Also today, FTX CEO Sam Bankman-Fried apologized for the collapse of the exchange and said that sister company Alameda Research will wind down trading.

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