ASIC revokes license of FTX's local business

The Australian Securities & Investments Commission (ASIC) announced on Wednesday the revocation of the license of FTX’s local subsidiary, effective from July 14. FTX, previously valued at $32 billion in January 2023, filed for U.S. bankruptcy protection last November due to its inability to fully reimburse customers who had deposited funds on its platform.

Since then, the cryptocurrency industry has faced increased scrutiny from regulators worldwide. Meanwhile, FTX founder Sam Bankman-Fried is confronting a criminal lawsuit by the U.S. government, accused of fraud. Bankman-Fried denies the allegations and has pleaded not guilty.

In November last year, ASIC initially suspended FTX’s license until May, temporarily prohibiting the exchange from engaging in derivative and foreign exchange contracts with retail and wholesale clients.

The regulator clarified that FTX Australia can continue to provide limited financial services until July 12, 2024, specifically for terminating existing derivatives with clients.

Despite the license cancellation, FTX Australia is still obligated to maintain membership in the Australian Financial Complaints Authority and uphold arrangements for compensating retail clients, ASIC confirmed.