Global: Australian Regulator Revokes License of FTX’s Local Business

The Australian securities regulator announced on Wednesday that it has cancelled the license of FTX’s local business in Australia, effective from July 14.

FTX, a U.S. cryptocurrency exchange headquartered in the Bahamas, experienced a significant downfall, filing for U.S. bankruptcy protection in November. The exchange cited its inability to fully reimburse customers who had deposited funds on its platform. Previously valued at $32 billion in January 2023, FTX’s collapse has been followed by increased regulatory scrutiny in the crypto industry.

Founder of FTX, Sam Bankman-Fried, is currently facing a criminal lawsuit by the U.S. government on charges of fraud. Bankman-Fried denies the allegations and has pleaded not guilty.

Last November, the Australian Securities & Investments Commission (ASIC) had temporarily suspended FTX’s license until May, revoking its permission to engage in derivative and foreign exchange contracts with retail and wholesale clients.

According to the ASIC, FTX Australia will be allowed to provide limited financial services for terminating existing derivatives with clients until July 12, 2024.

The license cancellation does not affect FTX Australia’s obligations as a member of the Australian Financial Complaints Authority or its arrangements for compensating retail clients, the ASIC added.