FTX Australia, the bankrupt crypto exchange’s Australian subsidiary, recently had its financial license canceled by the Australian financial services regulator. The Australian Securities and Investments Commission (ASIC) announced the cancellation, effective from July 14. Despite the cancellation, FTX Australia will be allowed to provide limited financial services until July 12 next year as it concludes its dealings with clients.
The regulator emphasized that FTX Australia is still obligated to make arrangements for compensating its clients during this period. Notably, FTX Australia served around 30,000 retail clients and provided services to 132 local companies.
ASIC had initially suspended FTX Australia’s Australian Financial Services (AFS) license in November. This suspension closely followed FTX’s bankruptcy filing on November 11, 2022. To support the restructuring process of FTX Australia and its subsidiary, FTX Express, voluntary administrators from the Sydney-based investment and advisory firm KordaMentha were appointed concurrently.
According to a recent report submitted to a United States bankruptcy court, the global entity overseeing FTX’s restructuring has successfully recovered approximately $7 billion in liquid assets. However, it has been alleged that customer assets worth a total of $8.7 billion were misappropriated. Discussions are currently underway with potential parties interested in financially backing a complete reboot of FTX as an entirely new exchange.
In a report on February 3, 2023, the Australian government’s proactive approach to cryptocurrency regulation aims to protect consumers and address the collapse of FTX, which affected over 30,000 individuals and 132 companies. By strengthening enforcement, enhancing consumer protection, and establishing a framework for token mapping, they are creating a safer crypto environment for all stakeholders.
These steps are taken into consideration because one of the major reasons is that young Australian investors aged between 18 and 24 are showing a strong interest in cryptocurrencies, and also the age between 25 and 49 accounts for 69% of the total investment in digital assets.
Recently, a report by Todayq News on July 17 stated that the National Australia Bank (NAB) has blocked certain cryptocurrency platforms to protect customers from scams. Binance may be among the affected exchanges. The move aligns with industry practices and addresses the rise of cryptocurrency-related scams in Australia, which cost Australians over $221 million last year. The bank aims to provide better protection against scammers and safeguard customer funds.