Australia Suspends Financial Services License of Local FTX Entity

By Saurabh Singla November 18, 2022438 views

Australia’s securities regulator has suspended the license of the Australian unit of the bankrupt crypto exchange FTX until mid-May. According to an issued statement, the platform will be allowed to provide limited financial services until Dec. 19 in order to terminate existing derivatives.

FTX Australia Sees License Suspended After Accepting Voluntary Administration

The Australian Securities and Investments Commission (ASIC) has suspended the financial services license of FTX Australia Pty Ltd. until May 15, 2023. The decision comes after the local arm of the failed cryptocurrency exchange was placed under voluntary administration on Friday.

In an announcement published on its website on Thursday, the regulator pointed out that the entity will be able to continue to provide limited financial services related to the termination of existing derivatives with clients until Dec. 19, 2022.

The suspension comes after the appointment of two voluntary administrators of FTX Australia and its subsidiary FTX Express Pty Ltd. on Nov. 11. The latter operates a digital currency exchange that is not regulated by ASIC, the Commission noted.

Also on Friday, FTX filed for Chapter 11 bankruptcy protection in the United States. The proceedings were commenced by FTX Trading Ltd., West Realm Shires Services Inc., which was trading as FTX US, and other affiliated companies. FTX Trading became the ultimate holding company of FTX Australia in September last year, ASIC detailed.

Australia’s financial services license (AFS) allowed FTX’s Australian platform to deal in, make a market for, and provide, general advice regarding derivatives and foreign exchange contracts to retail and wholesale clients.

ASIC emphasized it’s monitoring the situation in close contact with other regulatory bodies and external administrators. The Commission urged FTX clients to follow future developments and look out for updates from the FTX Group.

FTX was among the largest cryptocurrency exchanges, valued at $32 billion in January of this year. After its collapse, the trading platform became the target of investigations in the United States, the Bahamas, where it’s headquartered, Japan, and Turkey. Last week, Cyprus suspended the license it had issued to FTX allowing it to operate across the EU.

Do you expect similar regulatory decisions regarding FTX in other jurisdictions? Let us know in the comments section below.