19-7-2023 (SYDNEY) Australia’s securities regulator announced on Wednesday that it has revoked the license of the local branch of FTX, the collapsed U.S. cryptocurrency exchange. The cancellation came into effect on July 14.
Once a prominent player in the crypto industry, FTX, headquartered in the Bahamas, boasted a staggering $32 billion valuation in January 2023. However, the exchange encountered financial turmoil, leading to its filing for U.S. bankruptcy protection in November of the same year. The bankruptcy filing cited difficulties in fully reimbursing customers who had deposited funds on the platform.
Since then, the cryptocurrency industry has faced intensified scrutiny from regulators worldwide. Meanwhile, FTX’s founder, Sam Bankman-Fried, is grappling with a criminal lawsuit filed by the U.S. government, accusing him of fraudulent activities. Bankman-Fried has vehemently denied the allegations and pleaded not guilty.
Last November, the Australian Securities & Investments Commission (ASIC) initially suspended FTX’s license until May, rescinding the exchange’s permission to engage in derivative and foreign exchange contracts with both retail and wholesale clients.
Following the latest license cancellation, FTX Australia can still provide limited financial services to terminate existing derivatives with clients until July 12, 2024, as specified by the regulator.
It is important to note that the license revocation does not impact the requirement for FTX Australia to maintain its membership with the Australian Financial Complaints Authority and to have appropriate arrangements in place for compensating retail clients, according to the ASIC’s statement.
