(Bloomberg) -- The Japanese subsidiary of Sam Bankman-Fried’s failed crypto empire FTX has put together a draft plan for clients to withdraw funds, in what would be one of the rare cases of investors getting money back from the collapsed exchange.

The proposal, which has yet to be finalized, centers on using a platform called Liquid to facilitate the return of assets starting in January, according to people familiar with the matter. 

Bankman-Fried’s sprawling tangle of FTX group companies slid into a chaotic bankruptcy on Nov. 11, potentially bilking more than a million creditors around the world and fomenting turmoil in the crypto sector. The fallen crypto exchange owes its 50 biggest unsecured creditors a total of $3.1 billion, according to court filings.

FTX Japan customer balances would be transferred to Liquid after a verification process so that users can withdraw their money, said the people, who asked not to be identified discussing a private matter. The plan would need approval from the country’s regulator. FTX bought the operator of the Liquid platform this year to boost its presence in Japan.

FTX’s Japan unit referred questions to the parent company, which didn’t respond to an emailed request for comment. An official from Japan’s regulatory office declined to comment.

FTX Japan K.K. currently holds about $94.5 million in crypto assets and $46 million in fiat currency in designated client accounts, according to a draft of the proposal seen by Bloomberg News.

The proposal in Japan is in contrast to other countries where it’s unclear how much investors will recover from the bankruptcy. There’s already tension between liquidators in the Bahamas, where the global FTX operation was based, and US bankruptcy proceedings under the firm’s new Chief Executive Officer John J. Ray III, a turnaround and restructuring expert. A major source of conflict has been the Bahamas regulator’s move to seize FTX’s digital assets.


In Japan, the Financial Services Agency is seeking a road map and timeline for the return of customer assets as soon as possible, according to the document.

Under the proposal, client withdrawals could begin as early as the week of Jan. 9, according to the draft. The plan consists of phases including: data acquisition, authentication and data transfer, balance confirmation, and distribution and withdrawal, the document shows. 

Because FTX Japan is under the oversight of a US bankruptcy judge in Wilmington, Delaware, the proposal may require court approval before the money can be returned to customers.

--With assistance from Steven Church.

(Updates with US court proceedings at end)

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