In a decisive move, the Australian Securities and Investments Commission (ASIC) has revealed the cancellation of FTX Australia's financial licence following the bankruptcy declaration of its parent crypto exchange company.
However, the regulator clarified that FTX Australia is permitted to continue offering limited financial services to its clients until July 12, 2024, during which time it is expected to settle its remaining transactions.
The suspension came on the heels of the bankruptcy filing by FTX, the Bahamian-based parent company, on November 11, 2022.
That same day, voluntary administrators from Sydney-based KordaMentha, an investment and advisory firm, were appointed to assist in the restructuring of FTX Australia and its subsidiary, FTX Express.
ASIC has cancelled the Australian financial services licence held by FTX Australia https://t.co/Gsmsg9XcYj— ASIC Media (@asicmedia) July 19, 2023
Measures for client compensation
FTX Australia is also mandated to formulate adequate measures for client compensation until the specified date.
Previously, the crypto exchange company catered to roughly 30,000 retail clients and partnered with 132 local firms.
FTX Australia faced the suspension of its Australian Financial Services (AFS) licence in November 2022 by ASIC.
This licence enabled the crypto exchange to create derivative and foreign exchange contracts for its local clients.
Potential rebirth
According to a report presented to a US bankruptcy court last month, FTX's restructuring head claimed to have salvaged around US$7 billion in liquid assets.
However, it is alleged that customer assets worth an estimated US$8.7 billion have been misappropriated.
Emerging reports suggest a potential rebirth of FTX as a new exchange platform.
The restructuring team is purportedly in negotiations with interested parties that could financially support this new initiative.
The FTX Debtors have launched their online customer claims portal for the customer bar date, which has been set for September 29, 2023, at 4 PM ET. Customers can access the portal at https://t.co/DkYi2hDLbI. For more information, see our recent Release: https://t.co/vI9rQ27abp— FTX (@FTX_Official) July 13, 2023