The Australian financial regulator cancels FTX Australia’s license
The Australian Securities and Investments Commission (ASIC) has canceled the financial license of FTX Australia, a subsidiary of the failed crypto exchange. The cancellation took effect on July 14, with limited financial services allowed until July 12, 2023. FTX Australia must also make arrangements for compensating its clients.
FTX Australia’s troubles and bankruptcy
FTX Australia faced troubles when ASIC suspended its Australian Financial Services license in November last year. The suspension came after FTX, headquartered in the Bahamas, filed for bankruptcy. Administrators from KordaMentha were appointed to assist in restructuring FTX Australia and its subsidiary.
Legal woes and charges against FTX’s founder
FTX’s founder and former CEO, Sam Bankman-Fried, is facing criminal and civil charges in the US. Other associates of FTX have already pleaded guilty to similar charges. The regulatory actions against FTX extended beyond Australia, with Cyprus also suspending its operational license.
Returning customer funds
Despite facing complex bankruptcy proceedings, FTX’s subsidiaries are returning customer funds. FTX Japan resumed withdrawals in February 2023, while the European subsidiary introduced a dedicated withdrawal portal. The administrators of the Australian subsidiary are yet to confirm the return of customer funds.
Hot Take
The cancellation of FTX Australia’s license is another blow to the troubled crypto exchange and its founder. With ongoing legal battles and regulatory actions, FTX’s chances of recovery seem slim. However, the return of customer funds by its subsidiaries provides some hope for affected users.
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