Australian Financial Regulator Cancels FTX Australia’s License
The Australian financial services regulator has officially canceled the financial license of FTX Australia, the local subsidiary of the bankrupt crypto exchange. The cancellation was announced by the Australian Securities and Investments Commission (ASIC) on July 19 and became effective on July 14. While FTX Australia is still permitted to provide limited financial services, it is required to conclude its dealings with clients by July 12 next year.
According to ASIC, FTX Australia is obligated to make arrangements for compensating its clients until the specified deadline. The subsidiary had approximately 30,000 retail clients and provided services to 132 local companies.
In November, ASIC suspended FTX Australia’s Australian Financial Services (AFS) license, which authorized the creation of derivatives and foreign exchange contracts for local clients. This suspension occurred shortly after FTX, based in the Bahamas, filed for bankruptcy on November 11, 2022.
On the same day as FTX’s bankruptcy filing, voluntary administrators from the Sydney-based investment and advisory firm KordaMentha were appointed to assist in the restructuring of both FTX Australia and its subsidiary, FTX Express.
In a recent report submitted to a United States bankruptcy court, the restructuring chief for FTX’s global entity revealed that approximately $7 billion in liquid assets had been recovered. However, an estimated $8.7 billion worth of customer assets were allegedly misappropriated.
Reports suggest that FTX may potentially relaunch as an entirely new exchange, with its restructuring team engaging in discussions with parties interested in providing financial backing for this reboot.
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