BitFlyer, one of Japan’s largest crypto exchanges, agreed to acquire the Japanese subsidiary of FTX, the defunct crypto exchange founded by convict Sam Bankman-Fried.
FTX Japan was one of several companies affected by the collapse of FTX in November 2022. Despite the turmoil, FTX Japan continued to maintain that its customers’ assets were separated from FTX’s bankruptcy estate and has repaid its customers as of February 2023.
Crypto custody measure
According to a June 20 statement, BitFlyer wants to relaunch FTX Japan as a digital asset custody company aimed at institutional investors. It declared:
“[The Company] will provide services related to crypto asset spot ETFs, centered around its core business, if the legal system is established in Japan in the future. [The Company] will continuously maintain the crypto asset exchange service provider and the Type 1 financial instrument business license as the situation requires.”
BitFlyer noted that the adoption of spot Bitcoin ETFs in the US has expanded institutional investors’ access to the crypto asset market, which requires professional custodial services. There stood:
“Although the [ETF] The situation is not necessarily the same in the US and Japan. This trend is expected to increase the need for institutional investors to enter the crypto asset market in Japan, and crypto asset custody services are expected to become more important.”
Following the introduction of spot Bitcoin ETFs in the US, there is speculation that several Asian regulators could follow suit. Hong Kong has already launched crypto ETFs, but Japan is cautious about overcoming regulatory hurdles for these products.
Nevertheless, BitFlyer said the company would offer services tailored to the needs of financial institutions, including trust banks, if Japan were to establish a legal framework supporting spot ETFs for crypto assets.