On July 14, the Australian Securities and Investments Commission (ASIC) revoked the Australian Financial Services (AFS) license of FTX, a subsidiary operating in Australia, according to a July 19 statement.
The termination of the license will not affect FTX Australia’s arrangements to compensate its retail clients and its continued membership of the Australian Financial Complaints Authority. The exchange could also provide limited financial services for exiting existing derivatives with clients prior to July 12, 2024.
FTX Australia served 30,000 customers
Before the license was cancelled, FTX Australia served approximately 30,000 clients, making it one of the largest crypto platforms in the country.
Eight months before the collapse, in March 2022, ASIC had already begun raising concerns about FTX Australia’s operations. At the time, the regulator placed the exchange under “supervisory activity” based on concerns that it was circumventing controls over issuing new licenses.
The regulator would later suspend the exchange’s AFS license when it went into voluntary administration in November.
Meanwhile, two entities are reportedly related to the bankrupt Australia exchange, including FTX Australia. The two firms have approximately $42 million in customer assets.
Australia’s increasing efforts in crypto regulation
The revocation of FTX Australia’s license is part of the Australian government’s broader efforts to increasingly regulate the crypto industry.
In April, the ASIC conducted a compliance investigation of Binance’s financial services providers under local law and reportedly searched the platform’s offices earlier this month. Binance had abruptly revoked its derivatives license from the regulator, citing compliance with local laws.
Meanwhile, several Australian banks, including Westpac, National Australian Bank (NAB) and others, have recently restricted payments to crypto exchanges as part of efforts to reduce their clients’ exposure to scams.
The banks described cryptocurrency scams as one of the fastest growing security threats in the country.
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