Late to the Party? Regulator Cancels FTX Australia’s License

Australia’s securities regulator, the Australian Securities & Investments Commission (ASIC), announced that it has officially revoked the license of FTX, the local branch of the failed cryptocurrency exchange, FTX. 

The license cancellation, which became effective on July 14, comes after FTX encountered significant financial challenges, ultimately leading to its bankruptcy protection filing in the United States back in November of the previous year. 

FTX, once valued at a lofty $32 billion in January 2023, struggled to reimburse its customers’ deposits, resulting in the regulatory action taken against them.

Following the license suspension in November, ASIC had initially allowed FTX Australia to operate until May. However, with the latest decision, FTX Australia is no longer permitted to deal in derivative and foreign exchange contracts for both retail and wholesale clients. 

Nevertheless, the regulator has granted the exchange the ability to offer limited financial services to terminate existing derivatives with clients until July 12, 2024.

FTX’s founder, Sam Bankman-Fried, is currently facing a criminal lawsuit from the US government, accused of fraudulent activities, though he maintains his innocence and pleads not guilty. 

The crypto industry as a whole has been under increased scrutiny from regulators worldwide in the wake of FTX’s collapse and other similar incidents. 

Despite the license cancellation, FTX Australia must still uphold its obligations as a member of the Australian Financial Complaints Authority and have arrangements in place for compensating retail clients.

Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply