One of the largest cryptocurrency exchanges in Japan wants to acquire the local arm of the bankrupt crypto trading platform FTX.

According to a report from local media Nikkei, BitFlyer Holdings, the parent company of the crypto exchange BitFlyer, is in the process of acquiring FTX Japan. The deal, which has remained undisclosed until now, is in its final stages.

BitFlyer Holdings to Buy FTX Japan

The FTX Japan acquisition deal is reportedly expected to be worth billions of Japanese yen, which translates to tens of millions of dollars, reflecting the exchange’s market value. Notably, the deal is closely tied to FTX’s bankruptcy procedures currently ongoing in the United States.

BitFlyer will purchase all FTX Japan shares and take control of its business operations. Upon finalization of the deal, FTX Japan will reportedly pivot to crypto asset management or custody, with its target user base becoming institutional investors.

FTX launched its Japanese arm in June 2022, about five months before it collapsed. The launch was made possible by acquiring fintech company Liquid Group and all of its operating subsidiaries, including Quoine Corporation, one of the first crypto exchanges in the country. FTX gradually integrated its products into Quoine’s offerings, eventually turning the company into its Japanese arm.

FTX Group Still in Bankruptcy

When the FTX Group fell into bankruptcy in November 2022, Japanese authorities ordered FTX Japan to halt withdrawals and suspended the exchange’s operating license. While FTX wallowed in bankruptcy, FTX Japan argued that its customer assets were not part of the exchange’s bankruptcy proceedings, insisting that it would return client funds in the following months.

After much ado, the Japanese unit resumed withdrawals in late February, revealing that users’ requests would be processed through the local crypto exchange Liquid.

Before the Japanese entity resumed withdrawals, U.S. Judge John Dorsey approved FTX’s motion to sell four units, including stock-clearing platform Embed, derivatives arm LedgerX, FTX Europe, and FTX Japan. At the time, 41 parties globally expressed interest in acquiring the Japanese unit. Although the acquisition process has remained lowkey, it is evident that BitFlyer would emerge as the winner.

Meanwhile, FTX creditors have rejected the platform’s proposed reorganization plan, citing its failure to meet certain requirements of the Bankruptcy Code, including property rights and consistent debtors liquidation analysis.