FTX customers could get their money back in Japan, where the local unit is working on unfreezing withdrawals

• FTX users could get their money back in Japan, where the local unit is working on unfreezing withdrawals.
• It would be a rare case of FTX customers recovering funds locked on the platform since early November.

FTX customers stand a chance of getting their money back in Japan, after the collapsed crypto exchange's subsidiary there said it is working on unfreezing withdrawals.

If the plan becomes reality, it would mark a rare case of FTX crypto investors recovering funds locked on the platform since November 8, when the now-bankrupt exchange began running into trouble.

FTX Japan said Thursday a plan to restart withdrawals has been approved by its new trading management team, but with added safeguards.

"Development work for this plan has already started, and our engineering teams are working to allow FTX Japan users to withdraw their fund," it said in an announcement online.

"As part of the plan, we are incorporating controls, security audit, reconciliations, and reviews to put in place a robust and secure process," it added.

The funds are expected to be transferred to the Liquid platform — acquired by FTX Japan earlier this year — for the withdrawals to be carried out, sources close to the matter told Bloomberg.

FTX users have been trying to withdraw their funds from the crypto exchange ever since it filed for bankruptcy on November 11. In court Tuesday, lawyers for the company said they expect it to have millions of creditors, up from a previous estimate of 100,000.

The once-$32 billion FTX empire and its ex-CEO Sam Bankman-Fried have come under intense scrutiny since its implosion, which has raised fears that other crypto firms could founder. As much as $2 billion in FTX customers' funds has gone missing, Reuters reported.

US federal authorities are investigating FTX for potential mishandling of consumer funds, after Bankman-Fried quietly transferred $10 billion of funds to FTX's sister trading arm Alameda Research. A key question is whether those client funds were used by Alameda to cover loans that were being recalled.

Bankman-Fried has defended himself against accusations of wrongdoing, putting FTX's problems down to a combination of accounting mistakes and a wider market crash. He said didn't knowingly commingle funds and didn not ever try to commit fraud on anyone, speaking in an interview at the New York Times DealBook Summit on Wednesday.