Crypto Assets Industry Bracing for "Winter Time" after FTX Collapse
Tokyo, Nov. 21 (Jiji Press)--The collapse of cryptocurrency exchange FTX Trading Ltd. has sent wide-spread shockwaves, with the crypto assets industry bracing for the arrival of a full-fledged "winter time."
In Japan, FTX's collapse is having a limited impact compared with in other countries as a series of virtual currency theft cases had prompted the strengthening of user protection systems. In the United States, however, some companies having close ties with FTX have fallen into financial trouble and have been forced to partially suspend their services.
FTX Japan K.K. has explained that it had net assets of some 10 billion yen as of the end of September this year and that it manages client assets separately from its own assets. Japan's Financial Services Agency, which oversees the crypto assets industry in the country, believes that the assets of users in Japan are protected.
Still, the Japanese unit of FTX is covered by the U.S. Chapter 11 bankruptcy scheme for which its parent has applied and it is uncertain how that will affect the withdrawal of assets by users in Japan.
The market prices of crypto assets, which once went sky-high, have recently been slumping, partly reflecting a tumble in May this year of stablecoins, or cryptocurrencies pegged to legal tender, with the industry widely said to have entered a winter period.
[Copyright The Jiji Press, Ltd.]