Bitflyer to launch custodian crypto business after FTX Japan buyout

Japanese crypto giant bitFlyer has acquired FTX Japan, becoming a fully-owned subsidiary of the company.

The Tokyo-based parent company of cryptocurrency exchange Bitflyer announced that it has completed the acquisition of the Japanese branch of FTX Japan and acquired all of the outstanding shares of FTX Japan.

In a press release published Friday, bitFlyer said it plans to integrate FTX Japan into its operations and rebrand the acquired entity as a “Custody New Company” by August 26. The new entity is expected to focus on expanding bitFlyer’s crypto custody business using the company’s existing operational resources and wallet technology. The financial side of the acquisition was not 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, come into effect in Japan.”

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

BitFlyer

FTX Japan, which was wholly 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 client 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. The exchange’s founder, Sam Bankman-Fried, was sentenced to 25 years in prison and ordered to repay $11 billion.