Australian regulator annuls FTX license

The Australian Securities and Investments Commission (ASIC) has annulled the AFSL license of the local arm of the collapsed cryptocurrency exchange FTX.

The order took effect on July 14. From that moment, the platform has one year to settle its debts and wind down relationships with users.

According to the regulator, FTX Australia served around 30,000 retail clients and 132 local businesses.

The cryptocurrency exchange opened a division in Australia in March 2022. A few days after filing for bankruptcy in November, ASIC suspended the platform’s license, which allowed it to offer derivatives and currency contracts.

The regulator also appointed John Muawad, Scott Langdon and Rahul Goyal from KordaMentha as voluntary administrators for the restructuring of FTX Australia and its subsidiary FTX Express.

Local media reports said that ASIC was concerned about the operations of the Bitcoin exchange’s division and had been closely watching it long before the collapse.

In June 2023 reports emerged that over six months the collapsed company spent $121.8 million on consulting and financial services. Of that, $761,000 went to a working process called ‘relaunching the exchange’.

In January, the platform’s current chief John Ray first disclosed that a special task force was examining the possibility of reviving the company’s activities.

In April, Sullivan & Cromwell allowed for restructuring the exchange rather than liquidation or sale. The schedule they proposed envisaged that a detailed plan would be submitted in Q3 2023.

At that time, the idea of reviving FTX was voiced by the former head of institutional sales Zayn Taket. In his view, the platform should resume offering all products that existed before the collapse, adding a market for tokenised claims.

As reported in the press release, the exchange’s management team stated that it had achieved “significant progress” in securing client funds and, to date, had returned liquid assets totaling around $7 billion.