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FTX collapse: Japanese arm to resume customer withdrawals by the end of 2022, say reports

By Darius McQuaid

15:42, 21 November 2022

The Japan Flag is raised as the national anthem is sung during the Opening Ceremony of the Tokyo 2020 Olympic Games at Olympic Stadium on 23 July, 2021 in Tokyo, Japan
The Japanese regulator suspended FTX Japan’s operations a day prior to FTX announcing bankruptcy – Photo: Getty Images

The Japanese arm of bankrupt cryptocurrency exchange FTX aims to resume withdrawals by the end of 2022, an unnamed executive has told Japanese broadcaster NHK.

FTX filed for bankruptcy on 11 November 2022, with 130 other FTX affiliates following suite.

Due to FTX’S bankruptcy filing, FTX Japan cannot resume withdrawals immediately as it uses the same system as FTX. The Japanese arm is looking to develop its own system so that customers can withdraw their assets.

FTT to USD 

Japan’s FSA acted before FTX

Japan’s financial regulator the Financial Services Agency (FSA) ordered FTX Japan to suspend operations a day prior to FTX’s bankruptcy filing.

The FSA said FTX Japan must halt its crypto asset exchange business and stop accepting new customers until 9 December, effective immediately. The FSA did not say when FTX Japan could restart customer withdrawals.

XRP/USD

0.60 Price
+0.010% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

DOGE/USD

0.13 Price
-3.110% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

BTC/USD

66,760.65 Price
-0.920% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

ETH/USD

3,490.05 Price
-1.110% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

In response to the FSA’s order FTX Japan said it would be going into “close-only mode”.

The suspension order from the regulator was accompanied by a business improvement order, which requires FTX Japan to identify users, protect users assets and “appropriately disseminate information to users regarding the protection of their assets”.

However, FTX Japan has made it clear that it “is a separate entity that strictly follows the Japanese regulation on asset segregation”.

FTX Japan holding almost JPY20bn

As of 10 November, FTX Japan claimed to hold JPY19.6bn ($138m) in cash and deposits but has not confirmed the outflow of customers’ asset overseas.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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