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The Australian Securities and Investments Commission (ASIC) has declared the revocation of the AFS license for the bankrupt crypto exchange FTX’s Australian branch, effective from July 14. The Australian division previously served 30,000 retail clients and catered to 132 domestic businesses.
FTX Australia will be permitted to offer limited financial services while concluding its client engagements until July 12, 2024, as stated in Wednesday’s press release. During this timeframe, ASIC has requested the company to focus on compensating its clients.
ASIC Revokes FTX’s License
The exchange, based in the Bahamas, established two entities in Australia – FTX Australia and FTX Express. The former possessed the AFS license to provide derivative products to local consumers. Conversely, FTX Express facilitated the exchange of fiat currency for cryptocurrency and vice versa.
As FTX entered bankruptcy last November, the Australian securities regulator opted to suspend the license until May, revoking FTX’s authorization to engage in derivative and foreign exchange contracts with retail and wholesale clients in the nation. ASIC later restored the license to assist authorities in unwinding trading positions and tracing the source of customer funds.
The official announcement regarding this issue stated,
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“The cancellation has no effect on requirements for FTX Australia to continue as a member of the Australian Financial Complaints Authority, and to have arrangements for compensating retail clients.”
The revocation of the Australian Financial Services (AFS) license follows a significant crackdown on the crypto sector after last year’s FTX collapse.
Australian Crypto Regulation Intensifies
Although ASIC did not specifically cite FTX as the cause, the regulator indicated plans to combat scams nationwide as a rationale for subsequent actions, including Westpac prohibiting its users from making payments to Binance in May.
The Australian Prudential Regulation Authority (APRA) has also directed banking institutions to disclose their exposure to crypto-related enterprises and start-ups. The prudential regulator is reportedly aiming to gain a better understanding of exposures and vulnerabilities within the system.
As part of newly implemented measures, the Commonwealth Bank of Australia (CBA) – the largest bank in Australia – announced a temporary halt on “certain” payments to crypto exchanges last month.
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