Australian finance regulators are acting on the bankrupt FTX exchange in order to protect users. In the latest development, ASIC revoked FTX Australia’s AFS license until May 15, 2023.
The collapse of FTX created a rippling effect across the crypto industry, with countless individuals, groups, and platforms affected. There’s also a growing possibility of related firms declaring bankruptcy. This could give way to various lawsuits and legal actions against former FTX CEO Sam Bankman-Fried.
But one thing is for sure — lawmakers across the globe are going to intervene. Whether it be in the U.S, Australia, or even FTX headquarters home of The Bahamas.
FTX faces Australian heat
Australian Securities and Investments Commission (ASIC) has suspended the Australian financial services license of FTX Australia Pty Ltd until May 15, 2023. This announcement comes on Nov. 16 after the ASIC confirmed it on its official website after the exchange was placed into ‘voluntary administration.’
Before the suspension, the exchange will have some days to wrap up some financial services, including dealing in, making a market for, and providing general advice relating to derivatives and foreign exchange contracts to retail and wholesale clients.
The regulators added:
“Until 19 December 2022, FTX Australia can continue to provide limited financial services that relate to the termination of existing derivatives with clients.”
But again, the regulatory watchdogs will be closely monitoring the situation to avoid further mishaps.
30,000 users affected
The collapse of FTX was heard loud and clear in Australia.
At least 30,000 Australian investors and 132 companies were left in limbo as local FTX users were locked out of their accounts after the cryptocurrency platform became insolvent.
To assure affected users, ‘KordaMentha was appointed as voluntary administrator of FTX Australia and its subsidiary FTX Express Pty Ltd.’
Scott Langdon, representing the Sydney-based investment and advisory firm, opined:
“KordaMentha is now in control of both FTX Express and FTX Australia. We are working cooperatively with the directors to confirm the status quo and will report back to all stakeholders. We appreciate the uncertainty this creates for customers of FTX and will report to all customers as a matter of urgency.”
Overall, it was a short stint for FTX, which first established its roots in Australia on March 20 of this year.
A worldwide concern
FTX faced significant backlash not just in Australia but even regions from across the globe. Namely, Japan and The Bahamas.
As BeInCrypto reported, Japanese authorities, the Financial Services Agency (FSA), took administrative action against the Japanese unit of FTX. Meanwhile, The Bahamas, home of the FTX HQ, froze the exchange’s assets and those linked to “related parties.”
U.S. regulators, including the SEC and Department of Justice, likely won’t take long to jump in with potential heavy-handed regulations.