ASIC cancels license of FTX Australia

ASIC has canceled the Australian financial services (AFS) license held by FTX Australia Pty Ltd (FTX Australia), effective from 14 July 2023. This decision comes after a series of developments involving the company.

As part of the cancellation terms, FTX Australia will be allowed to provide limited financial services related to the termination of existing derivatives with its clients until 12th July 2024. Despite the license revocation, the company is still required to maintain its membership with the Australian Financial Complaints Authority and uphold arrangements for compensating retail clients.

The regulatory actions against FTX Australia began on 11th November 2022 when John Mouawad, Scott Langdon, and Rahul Goyal of KordaMentha were appointed as voluntary administrators for FTX Australia and its subsidiary, FTX Express Pty Ltd. It is important to note that FTX Express Pty Ltd operates a digital currency exchange that remains unregulated by ASIC.

Subsequently, on 14th November 2022, ASIC suspended FTX Australia's AFS license initially until 15th May 2023. However, this suspension was extended to 24th July 2023, leading to the ultimate cancellation of the AFS license on 14th July 2023.

As the situation unfolds, market participants and clients are closely monitoring the developments surrounding FTX Australia. The cancellation of its AFS license raises questions about the company's future operations and compliance with regulatory standards within the Australian financial services sector.