The Financial Services Agency of Japan has requested FTX Japan to suspend business orders, citing the policies of FTX Trading Limited.
The FSA said it had taken administrative actions against FTX Japan following FTX Trading Limited’s suspension of withdrawals “without explaining the reasons clearly to investors. The financial regulator said it had issued suspension orders and business improvement orders in accordance with Japan’s Payment Services Act and Financial Instruments and Exchange Act.
There have been reports that FTX Trading Limited is facing credit uncertainties. It is necessary to take all possible measures to prevent a situation in which the interests of creditors and investors are harmed by the outflow to affiliated companies of the company. Therefore, this situation of the company is not recognized as having the necessary system in place to properly carry out [its financial obligation.
Under the orders, FTX Japan will be required to suspend over-the-counter derivatives transactions and related margins as well as new deposits from users from Nov. 10 to Dec. 9 unless the FSA steps in. The financial regulator also ordered the exchange to hold its asset domestically over the same timeframe, properly reporting liabilities on its balance sheet.
