The top financial regulator in Japan, the Financial Services Agency (FSA) recently issued an order for FTX Japan to suspend business, which is the subsidiary of FTX.com in Japan.
The crypto exchange has also been ordered by the financial watchdog to provide a business improvement plan by a deadline of November 16th.
Regulator takes action
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On Thursday, the FSA (Financial Services Agency) in Japan announced that action had been taken by the Kanto Local Finance Bureau against FTX Japan.
As the name indicates, it is the Japanese subsidiary of the international crypto exchange FTX, owned by Sam Bankman-Fried, which is currently in a great deal of trouble.
A total of three orders have actually been issued, which include a business improvement order, a business suspension order and also an order for domestically holding assets.
The order dictates that operations of FTX Japan will be suspended from November 10th to December 9th and during this time, the exchange will not be permitted to accept new assets from its clients.
A deadline of November 16th has also been given to the company for submitting a business improvement plan.
The reason
According to the FSA announcement, the decision of FTX Japan to stop customer withdrawals without providing a date for resumption, while still allowing them to conduct crypto transactions and make deposits is a problem.
The regulator said that it indicates that the exchange does not have the structure necessary for offering crypto exchange services in accordance with the standards in the country.
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FTX Japan explained that it had suspended withdrawals in accordance with the policy of its parent company.
On Wednesday, the exchange said that they had suspended crypto withdrawals as well as that of legal currency temporarily according to the head office’s policy.
The response
On Thursday, FTX Japan responded to the business suspension order issued by the FSA.
The exchange said that they would halt fiat currency deposits, spot trading, derivative transactions, new account opening and incoming crypto transfers.
As far as the business improvement order is concerned, the exchange said that this order would be taken seriously by all employees, as well as the management team.
It said that they would come up with an improvement plan and then implement it steadily. It also added that it would make an effort to comply with all relevant regulations and laws and strengthen its management system for regaining its clients’ trust.
FTX Japan, this Friday, announced that they had resumed some withdrawals in the Japanese yen. The Japanese regulator had taken action after the crypto empire of Sam Bankman-Fried came crashing down.
Reports indicated that he had told FTX investors that they need an emergency cash injection, or they could go bankrupt.
The Security Commission of the Bahamas also ordered the assets of its Bahamas subsidiary be frozen and they are conducting an investigation of alleged mismanagement of customer funds.
