Bitflyer to launch custodian crypto business after FTX Japan buyout

Japanese crypto giant bitFlyer has completed its acquisition of FTX Japan, making it a fully owned subsidiary.

Bitflyer, a Tokyo-headquartered parent company of the self-named crypto exchange, said it has completed the acquisition of FTX’s Japanese branch, buying out 100% of the outstanding shares of FTX Japan.

In a Friday press release, BitFlyer said plans to integrate FTX Japan into its operations, rebranding the acquired entity as “Custody New Company” by Aug. 26. The new entity will seemingly focus on expanding bitFlyer’s crypto custody business, leveraging the company’s current operational resources and wallet technology. The financial side of the acquisition wasn’t disclosed.

According to the press release, the yet-to-be-named custodian will also explore services related to physical crypto exchange-traded funds, “once the legal system, including tax regulations, is in place in Japan.”

“By acquiring all shares and management rights of FTX Japan, we aim to achieve sustainable growth, leveraging synergies within the bitFlyer Group to develop new services, benefiting not only FTX Japan and its customers but all stakeholders of the bitFlyer Group.”

BitFlyer

FTX Japan, which was fully owned by FTX Japan Holdings prior to this acquisition, has been under Chapter 11 bankruptcy protection since November 2022. The Japanese arm ceased its exchange operations following the bankruptcy filing but continued to manage customer assets.

FTX collapsed in late 2022 amid allegations of embezzlement and misappropriation of billions of dollars in customer funds involving its owners and affiliated hedge fund Alameda Research. Sam Bankman-Fried, the founder of the exchange, was sentenced to 25 years in prison and ordered to reimburse $11 billion.