Friday, December 9, 2022
HomeTechnologyThe Japanese Financial Authority Asks FTX Japan To Cease Operations

The Japanese Financial Authority Asks FTX Japan To Cease Operations

The Financial Services Agency of Japan, also known as the FSA, has asked FTX Japan to stop all business orders, citing the policies of FTX Trading Limited as the reason.

Following the suspension of withdrawals by FTX Trading Limited “without explaining the reasons fully to investors,” the Financial Services Authority (FSA) said that it has launched administrative procedures against FTX Japan in a statement made on November 10. In compliance with Japan’s Payment Services Act and Financial Instruments and Exchange Act, the financial regulator said that it has issued suspension orders as well as business improvement orders.

According to the directives, FTX Japan will be compelled to halt over-the-counter derivatives transactions and associated margins as well as new deposits from users from November 10 to December 9; however, this requirement will only apply if the FSA does not intervene. The financial authority also told the exchange to keep its assets in the country for the same amount of time and to list all of its obligations correctly on its balance sheet.

According to the business improvement order issued by the FSA, FTX Japan is required to submit a plan by November 16 that details how the company plans to safeguard investors and provide transparency on the current crisis with FTX.

FTX Japan, which was formerly known as the Quoine Corporation, was established by FTX in June in order to provide support for users of cryptocurrencies in Japan after the company’s purchase of the Liquid exchange in February. Sam Bankman-Fried, the current CEO of FTX, used to be the temporary CEO of FTX Japan. He recently apologised for the exchange not being open about the “liquidity crisis” it was going through.

Although Bankman-Fried said that the United States-based exchange, FTX US, which is a different corporate entity from FTX, “was not financially damaged” by the issues confronting the primary exchange, it is unknown how the challenges faced by FTX may affect the business and operations of FTX Japan.

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Reporter
Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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