Ahmed Ali The financial services license of FTX Australia, a subsidiary of the now-bankrupt crypto exchange FTX, has been canceled by the Australian Securities and Investments Commission (ASIC). The regulatory body officially announced this cancellation, effective from July 14, 2023, limiting FTX Australia to only offering certain financial services. These permitted services will be related to the closure of derivatives with clients and arrangements to compensate retail customers.
FTX, once a prominent digital asset exchange headquartered in the Bahamas, encountered severe liquidity issues and eventually sought Chapter 11 bankruptcy protection in the State of Delaware on November 11, 2022. Subsequently, Australian authorities appointed three voluntary administrators for FTX Australia and its subsidiary, FTX Express Pty Ltd. The latter operates a digital currency exchange that falls outside the scope of ASIC regulation.
The initial suspension of FTX Australia’s AFS license occurred on November 14, 2022, with a set expiration date of May 15, 2023. However, the suspension was later extended until July 24, 2023.
Despite the license revocation, FTX Australia will remain obligated to fulfill requirements as a member of the Australian Financial Complaints Authority and uphold arrangements to compensate retail clients.
This development has certainly raised discussions about ASIC’s decision to revoke the license. What are your thoughts on this matter? Feel free to share them in the comments section below.
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Frequently Asked Questions (FAQs) about cryptocurrency exchange
What led to the cancellation of FTX Australia’s financial services license by ASIC?
The cancellation of FTX Australia’s financial services license by ASIC was prompted by its affiliation with the failed crypto exchange, FTX, which filed for bankruptcy in the United States due to liquidity issues.
What financial services will FTX Australia be allowed to offer after the license cancellation?
Following the license cancellation, FTX Australia will be restricted to providing limited financial services, specifically related to the termination of existing derivatives with clients and arrangements for compensating retail customers.
Is FTX Australia still a member of the Australian Financial Complaints Authority (AFCA) despite the license cancellation?
Yes, the cancellation of FTX Australia’s financial services license does not impact its membership status with the Australian Financial Complaints Authority (AFCA). It remains obligated to fulfill the requirements set by AFCA.
What led to FTX’s bankruptcy, and where is its founder, Sam Bankman-Fried, now?
FTX, once one of the world’s largest digital asset exchanges, faced liquidity issues, leading to its Chapter 11 bankruptcy protection filing in the State of Delaware on November 11, 2022. Its founder, Sam Bankman-Fried, was extradited to the United States to face a lawsuit for alleged fraud.
Was FTX Australia’s digital currency exchange regulated by ASIC?
According to the Australian Securities and Investments Commission (ASIC), FTX Australia’s subsidiary, FTX Express Pty Ltd, operates a digital currency exchange that is not regulated by ASIC.
How long was FTX Australia’s financial services license initially suspended before the final cancellation?
FTX Australia’s financial services license was initially suspended on November 14, 2022. The suspension, which was initially imposed until May 15, 2023, was later extended until July 24, 2023. Ultimately, ASIC decided to cancel the license, effective from July 14, 2023.
More about cryptocurrency exchange
- “ASIC Official Website” (https://asic.gov.au/)
- “FTX Official Website” (https://ftx.com/)
- “Australian Financial Complaints Authority (AFCA)” (https://www.afca.org.au/)
- “FTX Australia’s License Cancellation News” (Link not provided in the original text, but you can find relevant news on financial news websites or ASIC’s press releases section)
