Japan’s top financial regulator, the Financial Services Agency (FSA), has issued a business suspension order to FTX Japan, the Japanese subsidiary of FTX.com. The financial watchdog has also ordered the crypto exchange to submit a business improvement plan by Nov. 16.

Japanese Regulator Takes Action Against FTX Japan

Japan’s Financial Services Agency (FSA) announced Thursday that the Kanto Local Finance Bureau has taken action against FTX Japan, the Japanese subsidiary of Sam Bankman-Fried’s embattled crypto exchange FTX.com.

Three orders have been issued against the crypto exchange: a business suspension order, an order to hold assets domestically, and a business improvement order. FTX Japan must suspend operations from Nov. 10 to Dec. 9 and the exchange cannot accept new assets from clients during that time. The regulator has also ordered the company to submit a business improvement plan by Nov. 16.

The FSA announcement explains that FTX Japan’s decision to halt customer withdrawals without specifying a schedule for resumption, while acceptance of investors’ assets and crypto transactions continue, means the exchange does not have the necessary structure to provide crypto exchange services in a manner deemed appropriate under the Japanese standards.

FTX Japan cited its parent company’s policy for withdrawal suspension. “In accordance with the policy of the head office, we have temporarily suspended the withdrawal of crypto assets and the withdrawal of legal currency,” the exchange said Wednesday.

Responding to the business suspension order, FTX Japan informed its users Thursday that during the suspension period, services relating to new account opening, spot trading, fiat currency deposits, incoming crypto transfers, and derivatives transactions are halted.

Regarding the business improvement order, the exchange informed customers: “All employees, including the management team, will take this business improvement order seriously, formulate an improvement plan, and steadily implement it. In addition, we will make a company-wide effort to thoroughly comply with relevant laws and regulations and further strengthen our management system in an effort to regain the trust of our customers.” On Friday, FTX Japan announced that some Japanese yen withdrawals have been resumed.

The action taken by the Japanese regulator followed the dramatic downfall of Bankman-Fried’s crypto empire. He reportedly told FTX.com investors that his company needs an emergency cash injection or it may have to file for bankruptcy.

The Bahamas Securities Commission has frozen the assets of the Bahamian subsidiary of FTX.com and U.S. authorities are investigating the exchange for alleged mishandling of customer funds.

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