- ASIC suspends FTX’s local subsidiary in Australia
- The Security regulator said it had placed FTX Australia into voluntary administration until 19 December
- ASIC says the license may be returned by May 2023.
Since the crypto exchange’s debacle began, several individuals and authorities have been assessing the level of damage. Similarly, the authorities have been releasing several regulatory guidelines to mitigate the effect of the crash.
These guidelines range from regulators going toe t toe with possible guilty key players in the ecosystem to others denouncing their relationship with the company. The latest such regulation comes from the Australian Securities Regulator.
ASIC Suspends FTX Australia’s License
The Australian Securities & Investments Commission (ASIC) said it had suspended the license of FTX Australia. The Australian Securities Regulator said the license suspension takes effect immediately until May 2023.
Furthermore, the implication is that the regulator has taken back the permit that it previously issued. The exchange can no longer deal with retail and wholesale clients in derivative and foreign exchange contracts. In addition, they can not provide general advice.
The Australian Securities & Investments Commission (ASIC) said,
We are monitoring this situation closely and speaking regularly with international regulators— and external administrators.”
As part of the announcement, ASIC said it is monitoring the situation closely. They, therefore, encourage clients of the company to monitor closely and look out for updates from the FTX Group.
Even though it has not responded to the license suspension, experts say it can apply to the Administrative Appeals Tribunal. The Appeal will review the decision of the Australian Securities & Investments Commission (ASIC).
Similarly, ASIC has also placed the company into voluntary administration. After that, it appointed John Mouawad, Scott Langdon, and Rahul Goyal of KordaMentha as voluntary administrators of FTX Australia and FTX Express Pty Ltd.
The FTX Express is a subsidiary of the FTX group that operates a digital currency exchange and is not regulated by ASIC.
What is Next on the Horizon?
Bad news couldn’t have come at a more disappointing time frame for FTX. Once a highly regarded crypto exchange, it now swims in the backward waters of negative controversies.
Rocked by bankruptcy and intense regulatory scrutiny, the crypto exchange keeps sinking to new lows.
In what seems to be a lenient approach, ASIC allows the company to conduct some services. They said it can continue to provide limited financial services for terminating existing derivatives with clients until 19 December.
There are expectations that before the license is validated in May next year, the crypto exchange will overcome the challenges.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.