Australian Securities Watchdog Cancels FTX Australia’s AFS License

The Australian Securities and Investments Commission (ASIC) has announced the revocation of the AFS license of the bankrupt Australian FTX entity, effective July 14.

FTX Australia will be able to provide limited financial services while terminating its client interactions until July 12, 2024, according to Wednesday’s press release. During this period, ASIC required the company to work towards compensating its customers.

ASIC revokes FTX license

The Bahamas-based exchange has opened two entities in Australia – FTX Australia and FTX Express. The former holds an AFS license to offer derivative products to local customers. On the other hand, FTX Express is responsible for allowing customers to exchange cryptocurrencies and vice versa.

With FTX entering bankruptcy last November, the Australian Securities Regulatory Authority decided to suspend the license until May, revoking FTX’s permission to deal in derivatives and forex contracts for retail and wholesale clients in the country. ASIC later reinstated the license to enable authorities to help resolve the trading posts and determine the source of clients’ funds.

the official statement On the subject read,

“The cancellation has no impact on FTX Australia’s requirements to continue as a member of the Australian Financial Complaints Authority, and to have arrangements for compensation for retail clients.”

The revocation of the Australian Financial Services (AFS) license follows a crackdown on the cryptocurrency industry in the wake of the FTX crash last year.

Australian Crypto Clampdown

While ASIC did not explicitly disclose FTX as the cause, the regulator cited plans to curb fraud across the country as a reason for subsequent actions involving Westpac blocking its users from making payments to Binance in May.

The Australian Prudential Regulatory Authority (APRA) has also instructed banking institutions to publicize their exposure to cryptocurrency-related projects and startups. It is said that the prudential regulator Pursuit To gain more information about system exposures and vulnerabilities.

As part of the newly introduced measures, the Commonwealth Bank of Australia (CBA) – which also happens to be Australia’s largest bank – announced a temporary suspension of “certain” payments to crypto exchanges last month.