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Japan Financial Services Agency(FSA) required the Japanese branch of the FTX exchange to suspend all over-the-counter derivatives transactions to protect the interests of investors and creditors.
The FSA said it had taken action against FTXJapan after the parent company suspended the withdrawal of funds without a clear explanation to investors. The regulator prohibited the exchange from conducting over-the-counter transactions with derivatives, as well as opening new user deposits.
“There have been reports that FTXTrading Limited is facing credit uncertainty. Every effort must be made to ensure that the interests of creditors and investors are not harmed by the flow of assets to affiliated companies,” the FSA said.
Operations suspended from November 10 to 9December - during this period only the FSA can renew them early. The financial regulator also ordered the exchange to hold its assets within the country during the same period, reflecting liabilities on its balance sheet. In addition, by November 16, FTX must submit a plan to the FSA to protect investors and ensure transparency of the company's current state of affairs.
Earlier, the founder of the Tron project, Justin Sun, said that the FTX liquidity crisis, despite its short-term nature, is detrimental to both the development of the industry and investors.