Japanese cryptocurrency exchange BitFlyer is set to acquire the Japanese branch of the defunct crypto platform FTX, in a move that promises to shake up the crypto industry. BitFlyer Holdings announced on June 20 its plans to acquire and rebrand FTX Japan.

Post-acquisition, FTX Japan’s focus will pivot from running a crypto exchange to offering institutional-grade crypto custody services. The platform will initially be rebranded as "New Custody Company," with a final name yet to be decided. BitFlyer’s announcement highlighted that the newly acquired platform aims to provide services related to crypto exchange-traded funds (ETFs), a market yet to be tapped in Japan. However, this is contingent on the establishment of a supportive legal framework, including tax regulations. If approved, these services will cater to financial institutions, including trust banks, under the New Custody Company brand.

Moreover, customer accounts from FTX Japan will be transferred to BitFlyer, pending customer consent. Local news outlet Nikkei reported that BitFlyer’s acquisition of FTX Japan cost billions of yen, equating to tens of millions of dollars.

FTX Japan, previously known as Liquid, was acquired by Sam Bankman-Fried’s FTX exchange in early 2022, only to be rebranded and subsequently caught in the fallout of FTX’s collapse in November 2022. Despite the turmoil, FTX Japan maintained that its customers’ assets were separate from FTX’s bankruptcy proceedings, allowing it to resume withdrawals and reimburse customers by February 2023. FTX’s aggressive acquisition strategy in 2022 included the $1.4 billion purchase of crypto brokerage firm Voyager Digital in October. In April 2024, a U.S. judge approved a $450-million settlement between FTX debtors and bankrupt Voyager.

This acquisition news follows closely on the heels of Bankman-Fried’s 25-year prison sentence in the United States for seven felony charges.