Australia’s financial markets regulator has suspended FTX Australia license until 2023. At least 30,000 Australian investors and 132 companies have suffered due to FTX’s collapse.
Following the appointment of a volunteer administrator to assist approximately 30,000 Australians and 132 Australian firms in recovering their cash from FTX, Australia’s financial markets regulator has terminated FTX Australia’s financial license. The Australian Securities and Investments Commission (ASIC) delivered the announcement on November 16, suspending the local FTXS entity’s Australian Financial Services (AFS) license until May 15, 2023.
Prior to its suspension, FTX Australia’s AFS license allowed it to establish a market for foreign currency contracts and derivatives for retail and wholesale clients headquartered in Australia. FTX Australia served as the conduit for Australian traders who registered to trade digital assets.
However, until December 19, FTX Australia is only allowed to offer a small number of financial services that are only focused on terminating current derivative contracts with its clients.
The suspension comes as John Mouawad, Scott Langdon and Rahul Goyal of Sydney-based investment and advisory firm KordaMentha were appointed as voluntary administrators to provide restructuring services to FTX Australia and its subsidiary FTX Express on Nov. 11.
According to a report in the Australian Financial Review, KordaMentha will try to recover the cash of roughly 30,000 Australian investors and 132 Australian businesses as a result of the disastrous FTX aftermath (AFR).
According to the article, FTX Australia staff members have been working with KordaMentha’s administrators to find a solution. Sam Bankman-Fried, the founder and former CEO of FTX, is mentioned. The report added that FTX Australia employees have been cooperating with KordaMentha’s administrators to resolve the matter.
FTX Collapse a Worldwide Concern
FTX received a lot of negative press, not just in Australia but also in other parts of the world. Japan and the Bahamas, specifically. The Financial Services Agency launched administrative action against FTX’s Japanese branch.
The exchange’s assets and those connected to “associated parties” were simultaneously frozen in The Bahamas, where the FTX headquarters is located. Regulators in the United States, such as the SEC and Department of Justice, are expected to enact potentially onerous rules quickly. Businesses such as Visa are also ending partnerships with FTX.