The Australian Securities and Investments Commission (ASIC) announced the cancellation of the AFS license of bankrupt crypto exchange FTX’s Australian entity, effective from July 14. The Australian arm had once boasted 30,000 retail clients and serviced 132 domestic companies.
FTX Australia will be able to provide limited financial services while winding up its client interactions until 12 July 2024, according to Wednesday’s press release. During this period, ASIC has asked the company to work towards compensating its clients.
The Bahamas-headquartered exchange opened two entities in Australia – FTX Australia and FTX Express. The former held the AFS license to offer derivative products to local customers. FTX Express, on the other hand, is responsible for allowing customers to exchange fiat for cryptocurrency and vice versa.
As FTX slipped into bankruptcy last November, the Australian securities regulator decided to suspend the license until May, revoking FTX’s permit to deal in derivative and foreign exchange contracts to retail and wholesale clients in the country. ASIC later reinstated the license to enable authorities to assist in unwinding trading positions and determining the origin of customer funds.
The official statement regarding the matter read,
“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 cancellation of the Australian Financial Services (AFS) license comes in the wake of an intense crackdown on the crypto industry following last year’s FTX implosion.
While ASIC did not explicitly reveal FTX to be the reason, the regulator did mention plans to curb scams across the country as a reason for subsequent actions that include Westpac banning its users from making payments to Binance in May.
The Australian Prudential Regulation Authority (APRA) also instructed banking establishments to declare their exposure to crypto-related ventures and start-ups. The prudential regulator is reportedly seeking to gain more insight into exposures and vulnerabilities in the system.
As part of newly introduced measures, the Commonwealth Bank of Australia (CBA) – which happens to be the largest bank in Australia – announced a temporary suspension of “certain” payments to crypto exchanges last month.