Securities Commission Cancels FTX Australia’s License

Australia’s securities regulator has canceled the license of the local FTX entity, allowing it to perform only limited financial services. These will be related to the termination of derivatives with clients and arrangements to compensate retail customers.

ASIC Revokes Financial Services License of Crypto Exchange FTX Subsidiary

The Australian Securities and Investments Commission (ASIC) announced it had canceled the financial services license of FTX Australia, a company owned by the failed crypto exchange FTX which filed for bankruptcy in the United States last fall.

“ASIC has cancelled the Australian financial services (AFS) license held by FTX Australia Pty Ltd (FTX Australia), effective from 14 July 2023,” the regulatory body said in a press release published Thursday on its website.

Under the cancellation terms, FTX Australia will be permitted to provide limited financial services related to the termination of existing derivatives with clients until the end of July 12, 2024, the Commission noted and also highlighted:

The cancellation has no effect on requirements for FTX Australia to continue as a member of Australian Financial Complaints Authority, and to have arrangements for compensating retail clients.

The Bahamas-headquartered FTX, which was one of the world’s largest digital asset exchanges, sought Chapter 11 bankruptcy protection in the State of Delaware on Nov. 11, 2022, amid liquidity issues. Its founder Sam Bankman-Fried was extradited to the U.S. where he faces a lawsuit for alleged fraud.

Also on Nov. 11, Australian authorities appointed three voluntary administrators of FTX Australia and its subsidiary, FTX Express Pty Ltd which, according to the securities regulator, operates a digital currency exchange not regulated by ASIC.

FTX Australia’s AFS license was suspended by the Australian Securities and Investments Commission on Nov. 14, 2022. The suspension, initially imposed until May 15, 2023, was later extended to July 24, 2023.

What are your thoughts on ASIC’s decision to revoke the financial services license of FTX’s Australian entity? Share them in the comments section below.

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