The financial markets regulator of Australia has taken an action against the FTX branch operating in Australia. The reports coming in have confirmed that the regulator has suspended the exchange’s license.
Australia Takes Action against FTX Australia
The FTX-backed entity currently operating in Australia offering crypto services is FTX Australia. The reports have confirmed that the license for FTX Australia has been suspended by the Australian regulators.
It is the financial markets regulator of Australia that has reportedly suspended the license of FTX Australia. The regulator took action against the exchange after a complaint was raised against it by the local investors.
The investors involved a total of 132 companies from Australia and 30,000 local citizens who are eager to get their funds back from FTX.
The complaint has been raised by a voluntary administrator who has been appointed to pursue the case against the exchange.
The announcement by the ASIC
On November 16, the Australian Securities and Investments Commission issued a statement involving the FTX Australia exchange.
The regulator announced that they have suspended the license that the exchange was registered within Australia.
The regulator confirmed that it is the Australian Financial Services (AFS) license that the exchange had acquired from them. The ASIC has added that the license has been suspended until May 15, 2023.
Benefits of the AFS License
By acquiring the AFS license, the exchange was able to offer the Australian locals foreign exchange contracts. The exchange was also granted the license to operate and create a derivatives market.
With the permission, the FTX Australia entity would be able to target individual, wholesale, and retail clients.
Anyone who wanted to become a trader and signed up for digital assets was directed to the FTX Australia platform.
Despite the suspension, the exchange has the ability to perform a limited level of financial services to the locals in Australia. The exchange is now barred from offering derivative contracts to Australians.
Voluntary Administrators Pursuing the Case
The reports confirm that three administrators from KordaMentha, an advisory and investment firm in Sydney have picked up the case voluntarily. They are Rahul Goyal, Scott Langdon, and John Mouawad.
At the moment FTX Australia is in a crippled state as it operates in Australia. It is not the only entity facing the suspension of FTX Express, its subsidiary is facing the same suspension since November 11.
Now, the exchange has to return the funds of thousands of investors from Australia. If it is not able to do it, then it will proceed with filing bankruptcy, adding another bankruptcy to FTX’s failure list.
In the meanwhile, the trading price of FTX Token (FTT) has taken another hit. This time, FTX Token’s price has taken a 14.48% hit in the past 24 hours.
At the time of writing, FTT trades at a low of $1.56 and it is constantly losing its market value.
