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FTX Australia License Suspended Amid Financial Turmoil

Explore the suspension of FTX Australia's license by ASIC and the ongoing efforts to resolve the crisis affecting thousands of investors.
Published on 2022-11-16

FTX Australia License Suspension

Australia’s financial regulator, the Australian Securities and Investments Commission (ASIC), has suspended FTX Australia’s operating license. This decision is part of a broader effort to address the crisis impacting the exchange, following its voluntary administration. The suspension is set to last until May 15, 2023, affecting approximately 30,000 Australian investors and 132 firms.

Recovery Efforts

KordaMentha administrators have been appointed to manage the recovery of investors' funds. Employees of FTX Australia are reportedly cooperating with these administrators to facilitate the process. The Australian agency has emphasized its commitment to collaborating with international regulators and administrators to manage the situation effectively.

Continued Operations and Regulatory Cooperation

Despite the suspension, FTX Australia is permitted to continue certain financial services in the country until December 19. These services must relate to the termination of existing derivatives. ASIC has encouraged affected customers to seek updates from FTX Group and KordaMentha. The agency's ruling allows for an appeal at the Administrative Appeals Tribunal.

Global Implications

FTX Australia’s suspension comes amidst broader global challenges for the company. The Securities Commission of The Bahamas has frozen FTX’s assets and terminated its registration following a bankruptcy filing. The exchange is also under investigation in both the Bahamas and the U.S.

CEO's Response

Former FTX CEO Sam Bankman-Fried has expressed intentions to resolve liquidity issues, compensate customers, and potentially restart the exchange. Despite the financial turmoil, he claimed that Alameda, a related entity, held more assets than liabilities shortly before filing for bankruptcy.

Investor Concerns

The suspension leaves 30,000 Australian investors uncertain about their funds. Keeping informed about developments in the FTX case is crucial as the situation continues to evolve, impacting numerous stakeholders worldwide.

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