The Australian Securities and Investments Commission suspends FTX Australia’s licence

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The Australian Securities and Investments Commission suspends FTX Australia’s licence

By Hassan Maishera - min read

Crypto exchange FTX has lost its Australian licence a few days after it collapsed and filed for bankruptcy.

The Australian Securities and Investments Commission (ASIC), announced on Wednesday, November 16th, that it had suspended the licence issued to FTX Australia, the Australian arm of the FTX exchange.

In its blog post, the ASIC said;

“ASIC has suspended the Australian financial services licence of FTX Australia Pty Ltd (AFS licence 323193) until 15 May 2023 after it was placed into voluntary administration on 11 November 2022. Until 19 December 2022, FTX Australia can continue to provide limited financial services that relate to the termination of existing derivatives with clients.”

Prior to its suspension, FTX Australia’s AFS license allowed it to create a market for derivatives and foreign exchange contracts for Australian-based retail and institutional clients. 

The suspension came a few days after John Mouawad, Scott Langdon and Rahul Goyal of KordaMentha were appointed as voluntary administrators of FTX Australia and its subsidiary FTX Express Pty Ltd, which operates a digital currency exchange that is not regulated by ASIC.

ASIC added that it is monitoring this situation closely and speaking regularly with international regulators and external administrators.

FTX currently risks losing its licence in Europe following the collapse of the cryptocurrency exchange. Last week, Bloomberg reported that the Cyprus Securities and Exchange Commission (CySEC) could seize FTX’s European licence.

The licence allowed FTX to operate in Europe and provide its services to customers all over the continent. 

These latest developments began to unfold after FTX collapsed and filed for bankruptcy last week. The cryptocurrency exchange was reportedly using customers’ funds to fund Alameda Research, its sister hedge fund.

The move was against FTX’s terms and conditions and sparked a series of events that saw the once mighty crypto exchange crumble to its knees. The events that unfolded also saw CEO Sam Bankman-Fried resign from his role.