FTX, the once-prominent cryptocurrency exchange that collapsed in 2022 and led to its CEO Sam Bankman-Fried being charged with multiple crimes, including fraud, has announced plans to restart its Japanese exchange.
The company aims to maximize the value it can attain in a potential transaction by relaunching the business with regulatory approval.
Critical licenses for FTX
Maintaining the company’s licenses as a Crypto-Asset Exchange Service Provider and Type I Financial Instruments Business Operator under the Payment Services Act and the Financial Instruments and Exchange Act of Japan is critical to FTX’s success.
These Japanese Licenses are instrumental to FTX’s operations, as they allow the company to legally operate a spot and derivatives crypto exchange in Japan.
Obtaining these licenses typically takes two or more years, and few operators in Japan possess both, setting FTX apart from many competitors.
Key Employee Incentive Program (KEIP) proposed
FTX has proposed a Key Employee Incentive Program (KEIP) to motivate and retain essential personnel in the relaunch process. Under the KEIP, participants can earn up to two payments, with awards based on the percentage of the award pool.
The first payment, known as the “License & Restart Award,” will be earned by each KEIP participant on December 31, 2023, if specific conditions are met.
These conditions include the company maintaining its operative licenses as a Crypto-Asset Exchange Service Provider and Type I Financial Instruments Business Operator, resuming its exchange operations (i.e., spot exchange), and the KEIP participant remaining continuously employed by the company.
If earned, each KEIP participant will receive the License & Restart Award set forth in the table within 60 days after December 31, 2023.
Despite the company’s troubled past and the charges against its former CEO Sam Bankman-Fried, FTX’s plans to relaunch its Japanese exchange could signal a new beginning for the company.
The critical Japanese Licenses that FTX holds, as well as the proposed KEIP, may enable the company to attract investor interest and potentially recover from its previous collapse.
However, the success of this relaunch remains uncertain, and the company must navigate several hurdles in order to actually rebuild its reputation in the market, if ever.
