--- title: "FTX Japan and the Liquid group: purchase, regulators' orders and sale to bitFlyer" language: en canonical: https://dossiertwist.com/dossiers/ftx-trading-ltd/ftx-japan/ as_of: 2026-10-21 keywords: ["FTX Trading Ltd","FTX.com","FTX Trading Limited","Sam Bankman-Fried","Alameda Research","Paper Bird Inc.","Dotcom Silo","FTX Digital Markets","FTX Europe AG","FTX EU Ltd","FTX Japan","West Realm Shires","FTT","Chapter 11","FTX Recovery Trust","John J. Ray III","Caroline Ellison","Gary Wang","Nishad Singh","CFTC consent order"] --- # FTX Japan and the Liquid group: purchase, regulators' orders and sale to bitFlyer - Also known as: Quoine Corporation · QUOINE K.K. · Custodiem, Inc. - Jurisdiction: Japan (JP) - Company register: 7010401115356 (National Tax Agency of Japan (corporate number)) **Question.** How did FTX acquire FTX Japan, what did Japan's regulator order, and what happened to the company and its former executives' claims? **Answer.** FTX Trading Ltd. bought Liquid Group, owner of the Quoine exchanges in Japan and Singapore, in a deal agreed in 2021 and completed on 4 April 2022; Liquid became FTX Japan Holdings and Quoine became FTX Japan K.K. On 10 November 2022 Japan's Financial Services Agency announced that the Kanto Local Finance Bureau had ordered FTX Japan to suspend business and keep assets in Japan, and a further asset-holding order followed in March 2024. The terms for Japanese customers stated that their fiat was held in a segregated trust, the debtors state that the group segregated customer funds in Japan, and according to a former executive withdrawals resumed in February 2023. FTX Japan was sold to bitFlyer Holdings on 26 July 2024 and renamed Custodiem, Inc., while the Singapore exchange was wound down and its Chapter 11 case recognised in Singapore. Former Liquid executive Seth Melamed's claims against FTX Trading remained unresolved in the retained records. ## Buying the Liquid group - Analysis: Liquid Group, Inc. was a holding company owning two crypto exchange operators, Quoine Corporation in Japan and Quoine Pte. Ltd. in Singapore. According to Seth Melamed, a Liquid shareholder and executive, Liquid borrowed $120 million from FTX Trading Ltd under a loan agreement of 30 August 2021, after a breach of some of Quoine's hot wallets that was attributed to North Korean state actors, and a non-binding term sheet for FTX's purchase of Liquid followed on 2 September 2021. Melamed signed his share purchase agreement on 19 November 2021; he says that at completion on 4 April 2022 his shares and options were transferred to FTX, which agreed to pay him $44,516,390.24, including 1,019,070 FTX shares, and that Liquid became FTX Japan Holdings, Quoine became FTX Japan and Quoine Singapore became FTX Singapore. The Singapore International Commercial Court found that FTX Japan Holdings K.K. was a wholly owned subsidiary of FTX Trading Ltd and sole shareholder of Quoine Pte Ltd. ULS Group, a Tokyo-listed company, said in November 2022 that its business and capital alliance with QUOINE K.K. dated from 2016 and that it had dissolved the capital relationship on 19 April 2022. [src-089] [src-035] [src-058] - Documented: Seth Melamed's opposition to the debtors' claim objection describes Liquid Group, Inc. as a holding company that owned two cryptocurrency exchange operators, Quoine Corporation in Japan and Quoine Pte. Ltd. in Singapore, and states that on the completion date of FTX's purchase of Liquid, Liquid became FTX Japan Holdings, Quoine became FTX Japan and Quoine Singapore became FTX Singapore. A notice by ULS Group of 14 November 2022 likewise identifies FTX Japan K.K. (corporate number 7010401115356) as the former QUOINE K.K., and the Singapore International Commercial Court found that FTX Japan Holdings K.K. was a wholly owned subsidiary of FTX Trading Ltd and the sole shareholder of Quoine Pte Ltd. [src-089] [src-035] [src-058] - Qualification: Seth Melamed's opposition (Doc 23170, filed 16 August 2024) is a creditor's filing contesting the debtors' objection to his claims; it summarises his own declaration and its exhibits. In it, "FTX" means FTX Trading Ltd. - Documented: According to Melamed's filing, after a breach of some of Quoine's hot wallets in August 2021 that was attributed to North Korean state actors, Liquid borrowed $120,000,000 from FTX Trading Ltd under a loan agreement executed on 30 August 2021, and a non-binding term sheet for FTX's acquisition of Liquid Group was executed on 2 September 2021. Melamed signed the share purchase agreement for his Liquid Group shares, options and warrants on 19 November 2021; closing conditions were completed on 4 April 2022, when his shares and options were transferred to FTX, which agreed to pay him $44,516,390.24: 1,019,070 FTX common shares valued at $26,709,834.14, $8,903,278.05 in cash and $8,903,278.05 worth of cryptocurrency (the "Retained Consideration"). The filing states that before completion Melamed asked FTX several times to hold the Retained Consideration in segregated wallets. [src-035] - Qualification: Seth Melamed's opposition (Doc 23170, filed 16 August 2024) is a creditor's filing contesting the debtors' objection to his claims; it summarises his own declaration and its exhibits. In it, "FTX" means FTX Trading Ltd. The filing does not state the total price FTX paid for Liquid Group or which FTX entity held the acquired shares after completion. - Analysis: Japan's corporate register lists FTX Japan Holdings K.K. under corporate number 5010001199009 in Chiyoda-ku, Tokyo; a start-up database, undated, gives its establishment as 1 March 2019, its February 2022 announcement of the FTX transaction, and Kariya Kayamori as representative director with Melamed as chief operating officer, without saying when they held those posts. [src-016] [src-045] ## Japan's regulator and the customers - Analysis: On 10 November 2022 the Financial Services Agency announced that the Kanto Local Finance Bureau had ordered FTX Japan K.K., a registered crypto-asset exchange and Type I financial instruments business, to suspend business and improve its operations under the Payment Services Act, and had issued a domestic asset-holding order, a business suspension order and a business improvement order under the Financial Instruments and Exchange Act. A further domestic asset-holding order followed on 8 March 2024. No statement by FTX Japan answering the orders was retained, and the retained records do not show when the 2022 and 2024 orders were lifted. [src-058] [src-078] [src-017] [src-104] - Documented: On 8 March 2024 the Financial Services Agency announced that the Director-General of the Kanto Local Finance Bureau had issued a further domestic asset-holding order to FTX Japan K.K. (described as a Type I financial instruments business operator) under Article 56-3 of the Financial Instruments and Exchange Act. [src-017] [src-104] - Outcome: FTX Japan Holdings sold FTX Japan K.K. to bitFlyer Holdings on 26 July 2024, and the company, renamed Custodiem, Inc., kept its crypto-asset exchange and Type I financial instruments registrations; the retained records do not show when the 2022 and 2024 orders were lifted. - Analysis: Japanese customers were treated differently from FTX.com's: their terms stated that fiat deposits were held in a segregated trust, and the debtors acknowledge that the group segregated customer funds in Japan as local rules required. In his filing Melamed presents Quoine as a valuable licensed business, granted a Type 1 licence in October 2021 that required asset segregation and daily reconciliation, with 2021 monthly revenue across Japan and Singapore averaging $2.4 million; he states that FTX Japan resumed withdrawals on 21 February 2023, about 102 days after the petition, crediting the FTX Japan team's work and the fact that it had never commingled customer assets, and that by July 2024 some 13,000 customers had withdrawn about $200 million. The resumption date and these figures are his account and are not confirmed by any debtors' or regulator's record among the retained records. [src-036] [src-068] [src-035] - Documented: The debtors' second interim report states that, in accordance with local regulation, the FTX Group did segregate customer funds in Japan, Cyprus and Singapore, and that its findings exclude those jurisdictions and FTX.US, whose investigation was still ongoing in June 2023. [src-036] [src-068] - Qualification: For Cyprus, the debtors' May 2024 disclosure statement reports that after the suspension of its licence FTX EU Ltd was found not to hold enough segregated assets to meet its customer obligations. - Attributed: Melamed's filing presents Quoine as a valuable licensed business: it states that Quoine was granted a Type 1 licence on 31 October 2021, which required asset segregation and a daily reconciliation of assets under custody with customer obligations; that fewer than six crypto-related businesses in Japan held such a licence; that Liquid's monthly revenue from Quoine (Japan) and Quoine Singapore averaged $2,400,000 in 2021; and that Liquid had net assets of over $40 million by June 2021. The filing states that Melamed joined Quoine Corporation as head of operations in Tokyo in September 2017 and became chief operating officer of Liquid in November 2019. [src-035] - Qualification: Seth Melamed's opposition (Doc 23170, filed 16 August 2024) is a creditor's filing contesting the debtors' objection to his claims; it summarises his own declaration and its exhibits. In it, "FTX" means FTX Trading Ltd. The licence, revenue and net-asset figures are Melamed's account and are not independently confirmed in the retained records. ## Sale to bitFlyer - Analysis: On 19 June 2024 FTX Japan Holdings and bitFlyer Holdings, Inc. signed a share transfer agreement for all of FTX Japan K.K.; the Bankruptcy Court approved the sale on 16 July 2024 and dismissed FTX Japan's Chapter 11 case effective on closing, and the transfer was completed on 26 July 2024. bitFlyer announced that day that Melamed, Kurt Knipp and Atsushi Taira were leaving their posts and that Koya Takahashi, at the company since 2020 and a director of both FTX Japan companies from September 2022, would be representative director; on 28 August 2024 bitFlyer announced that FTX Japan had been renamed Custodiem, Inc., keeping its crypto-asset exchange and Type I financial instruments registrations. [src-035] [src-100] [src-118] [src-082] [src-104] - Documented: bitFlyer's announcement of 26 July 2024 lists Seth Melamed (representative director and chief operating officer), Kurt Knipp (director) and Atsushi Taira (audit and supervisory board member) as leaving their positions at FTX Japan as of that date, and names Koya Takahashi as representative director under the new management, with Yuzo Kano and three others as directors. The announcement gives Takahashi's career as joining Quoine Corp. (now FTX Japan K.K.) in June 2020 and serving as a director of FTX Japan Holdings K.K. and of FTX Japan K.K. from September 2022. [src-082] - Qualification: The extracted layout of the announcement does not show which of the departing officers retired and which were discharged. ## Quoine Pte Ltd and the other Quoine companies - Analysis: Quoine Pte Ltd, incorporated in Singapore in 2014, filed its own Chapter 11 case on 11 November 2022. Its board appointed Kurt Knipp and Philippe Taverne as foreign representatives in November 2024, and on 12 February 2025 the Singapore International Commercial Court recognised the case as a foreign main proceeding, finding that post-petition events had moved Quoine's centre of main interests to the United States; it granted relief tied to the debtors' plan but declined to recognise nine of the U.S. orders listed. The court recorded that Quoine no longer did business in Singapore, that the Liquid.com exchange had ceased trading, that its cash had moved to U.S. accounts under new U.S. management and that its digital assets were in the custody of BitGo Trust Company in the United States. Indian company records list Knipp as a director of Quoine India Private Limited, one of the original Chapter 11 debtors (its case was dismissed in April 2024), from 30 September 2024 and Kayamori among its past directors. [src-089] [src-073] [src-091] [src-095] - Documented: The Singapore court recorded, from an affidavit of David Johnston, that Quoine no longer operated a business in Singapore and the Liquid.com exchange had ceased doing business, that all cash had been transferred to US bank accounts with signatories changed to new US-based management, and that the digital assets formerly held by the Liquid.com exchange had been moved to the custody of BitGo Trust Company, Inc. in the United States. [src-089] [src-073] - Qualification: The claims agent's case website lists a section of Quoine Singapore liquidation documents; the documents themselves are not among the retained records. ## Former executives' claims - Analysis: Melamed says he became representative director and chief operating officer under a management agreement signed at completion, joined FTX Singapore's board in August 2022, stayed on at FTX Japan after the petition until the sale, and was terminated without cause as representative director of FTX Japan Holdings on 30 July 2024. He filed six claims: $35.6 million against FTX Trading for the sale of his Liquid shares, plus service fees of $52,500 and a $200,000 bonus against the Japanese and Singapore companies. He alleges that FTX misled him in the Liquid transaction with false audited financial statements, false statements that customer assets were segregated, concealment of Alameda's privileges, a false FTX Trading balance sheet and fraud in the Series B-1 round. The debtors objected on 10 July 2024, asking the court to disallow his main claim or reduce it and subordinate it as an equity claim, and to disallow the fee and bonus claims. No ruling is in the retained records: he appealed to the District Court, where mediation was found inappropriate in November 2024, and in October 2026 he was still litigating a reconsideration motion, while the docket also lists his suit against the FTX Recovery Trust. [src-035] [src-057] [src-073] - Documented: Melamed's filing states that, as a condition of closing, he signed a management agreement (amended on 30 June 2022 and 19 October 2022) under which he became representative director and chief operating officer; that he was appointed a director of FTX Singapore (Quoine Pte Ltd) on 26 August 2022; that he remained representative director and COO of FTX Japan after the petition date until its sale to bitFlyer Holdings on 26 July 2024, when he resigned; and that on 30 July 2024 the FTX debtor terminated him without cause as representative director of FTX Japan Holdings. It states that FTX Japan Holdings is a party to the management agreement and the 100% shareholder of FTX Singapore. [src-035] - Qualification: Seth Melamed's opposition (Doc 23170, filed 16 August 2024) is a creditor's filing contesting the debtors' objection to his claims; it summarises his own declaration and its exhibits. In it, "FTX" means FTX Trading Ltd. - Attributed: Melamed alleges that FTX made numerous misrepresentations to him in connection with the Liquid transaction, including false audited consolidated financial statements, false representations that customer assets were segregated, concealment of the extraordinary privileges given to Alameda Research, a false FTX Trading balance sheet as of 31 March 2021, and fraud in connection with FTX's Series B-1 financing round. [src-035] [src-057] [src-073] - Qualification: Seth Melamed's opposition (Doc 23170, filed 16 August 2024) is a creditor's filing contesting the debtors' objection to his claims; it summarises his own declaration and its exhibits. In it, "FTX" means FTX Trading Ltd. These are allegations in a contested claims dispute; the retained records do not show a ruling on them. - Response: The debtors' objection asks the court to disallow Claim 3385 or reduce it and subordinate it as an equity claim under section 510(b). - Outcome: No ruling on the claims is in the retained records: Melamed appealed to the District Court (Civil Action No. 24-1176-CFC), where a magistrate judge found on 27 November 2024 that the dispute could not be mediated, and in October 2026 he was still litigating a motion for reconsideration in the bankruptcy case. - Documented: Melamed appealed to the U.S. District Court for the District of Delaware against FTX Trading Ltd. (Civil Action No. 24-1176-CFC; Bankr. BAP No. 24-61). On 27 November 2024 a magistrate judge found, with the parties' agreement, that the dispute could not be resolved through mediation and recommended a briefing schedule running from January to March 2025. The claims agent's case docket later lists an adversary proceeding, Melamed v. FTX Recovery Trust (No. 26-50377), and on 19 October 2026 a response by Melamed in connection with a motion for reconsideration, together with his notice of a demonstrative exhibit for a hearing on 20 October 2026. [src-057] [src-073] - Qualification: The retained records do not show which bankruptcy court order Melamed appealed, the result of the appeal, or the outcome of the adversary proceeding and the reconsideration motion. - Analysis: FTX Trading's statement of financial affairs lists a $6,000,000 cash payment to Kayamori on 4 April 2022, describing his relationship to the debtor as director or officer. Kayamori filed claims against FTX and FTX Japan in June 2023; after the debtors objected in July 2024 he responded and asked to file his response under seal, describing the material as including the Liquid share purchase agreement, his separation agreement with the debtors and the debtors' financial statements. The retained records do not show how his claims were resolved. [src-096] [src-011] ## Sources - [src-089] Re Quoine Pte Ltd and others [2025] SGHC(I) 5, Singapore International Commercial Court, 2025-02-26 - [src-035] Court record source · src-035 - [src-058] Company statement source · src-058 - [src-016] gBizINFO corporate record for FTX Japan Holdings K.K. (corporate number 5010001199009), gBizINFO (Ministry of Economy, Trade and Industry, Japan) - [src-045] Corporate registry source · src-045 - [src-078] Administrative actions against FTX Japan K.K. (10 November 2022), Financial Services Agency of Japan, 2022-11-10 - [src-017] Administrative action against FTX Japan K.K. (8 March 2024), Financial Services Agency of Japan, 2024-03-08 - [src-104] Company statement source · src-104 - [src-036] Court record source · src-036 - [src-068] Court record source · src-068 - [src-100] gBizINFO corporate record for bitFlyer Holdings, Inc. (corporate number 1010401141275), gBizINFO (Ministry of Economy, Trade and Industry, Japan) - [src-118] Company statement source · src-118 - [src-082] Company statement source · src-082 - [src-073] Court record source · src-073 - [src-091] Corporate registry source · src-091 - [src-095] Corporate registry source · src-095 - [src-057] Order on mediation, Melamed v. FTX Trading Ltd., Civil Action No. 24-1176-CFC (D. Del.), U.S. District Court for the District of Delaware, 2024-11-27 - [src-096] Court record source · src-096 - [src-011] Court record source · src-011