ASIC Suspends FTX Australia's AFS License During The Crypto Exchange Meltdown

The Australian Securities and Investment Commission (ASIC) said that FTX Australia Pty Ltd, a subsidiary of the crypto exchange operator that declared bankruptcy a few days ago, would no longer be allowed to utilize its AFS license 323193.

FTX Australia's Australian financial services license permitted the company to trade in, develop a market, and give general advice on derivatives and foreign currency contracts to retail and wholesale customers.

After being put into voluntary administration on 11 November 2022, it will now be halted until 15 May 2023.

However, the corporation is permitted to continue providing restricted financial services related to the termination of existing derivatives with customers until December 19, 2022.

Table of Contents

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KordaMentha executives selected as FTX Australia's voluntary administrators

02

The FCA will not safeguard FTX clients in the UK.

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About ASIC

04

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KordaMentha executives selected as FTX Australia's voluntary administrators

KordaMentha's John Mouawad, Scott Langdon, and Rahul Goyal were appointed as voluntary administrators of FTX Australia and its subsidiary, FTX Express Pty Ltd, which runs an unregulated digital currency exchange.

FTX Trading Limited, West Realm Shires Services Inc (doing business as FTX US), and several other associated corporations filed for Chapter 11 bankruptcy protection under the United States Bankruptcy Code.

On September 23, 2021, FTX Trading Limited became the ultimate holding company of FTX Australia.

The Australian Securities and Investment Commission said that it is monitoring the issue closely and is in regular contact with foreign authorities and KordaMentha's outside administrators.

The administrators of the FTX Group and FTX Australia on the KordaMentha website advised FTX Australia to keep a careful eye on the issue and look for developments from both of them.

The FCA will not safeguard FTX clients in the UK.

The UK Financial Conduct Authority warned consumers yesterday that FTX clients in the UK are not covered by its regulatory authorities. The City watchdog stressed that anybody who does business with an unlicensed entity, such as FTX, is not covered by the UK lifeboat program and hence cannot file a complaint with the Financial Ombudsman Service. Instead, the FCA merely provided UK investors with a link to a general financial advice helpline for assistance.

“Any FTX client who has financial issues may get free, unbiased financial advice from MoneyHelper.” In the United Kingdom, cryptocurrency regulation is restricted to licensing UK-based crypto asset exchanges for anti-money laundering reasons. As a consequence, the FCA did not approve, regulate, or register FTX, it said.

Earlier this month, the UK's top financial regulator said that FTX lacks the requisite authorization to supply goods or services in the nation. The FCA cautioned at the time that FTX “is targeting persons in the UK” who are unlikely to receive their money back if they suffer a financial loss. That happened.

About ASIC

The Australian Securities and Investments Commission (ASIC) is an independent Australian government entity that serves as Australia's business regulator. It was founded on July 1, 1998, in response to the Wallis Inquiry's recommendations. The purpose of ASIC is to enforce and regulate corporate and financial services laws in order to safeguard Australian consumers, investors, and creditors. The Australian Securities and Investments Commission Act, of 2001 established ASIC's jurisdiction and scope.

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