Australia’s financial markets regulator has suspended FTX Australia’s financial license following the appointment of a volunteer trustee to help nearly 30,000 Australians and 132 Australian businesses recover their FTX funds.
The announcement was made by the Australian Securities and Investments Commission (ASIC) on November 16 local time, which suspended the Australian Financial Services (AFS) license of the local FTX entity. until May 15, 2023.
Prior to its suspension, FTX Australia’s AFS license allowed it to create a marketplace for FX derivatives and contracts for Australian-based retail and wholesale clients.. Australian traders registering to trade digital assets were directed through FTX Australia.
Nevertheless, FTX Australia has been allowed to provide limited financial services that strictly refer to the termination of existing derivative contracts with its clients until December 19.
The suspension occurs at the moment when John Mouawad, Scott Langdon and Rahul Goyal, of Sydney-based investment and advisory firm KordaMentha, were appointed as volunteer administrators to provide restructuring services to FTX Australia and its subsidiary FTX Express on November 11.
KordaMentha will attempt to recover the funds of almost 30,000 Australian investors and 132 Australian companies due to the catastrophic fall of FTX, according to a November 14 report in the Australian Financial Review (AFR).
The report adds that FTX Australia employees have been cooperating with KordaMentha managers to resolve the matter. FTX founder and former CEO Sam Bankman-Fried is listed as one of the three directors of FTX Australia.
FTX Australia’s suspension of customer-facing operations comes almost eight months after its inception, on March 20. The company has also established a Sydney-based office for its five employees.
Last week, 130 companies linked to FTX, including FTX US and its associated trading company Alameda Research, filed for bankruptcy under Chapter 11 of the United States Code on November 11.the same day that Bankman-Fried also stepped down as CEO of FTX.
ASIC noted that FTX Australia has the right to apply to the Administrative Court of Appeal to challenge ACIS’s decision.
Cointelegraph has reached out to the ASIC and FTX for comment on the matter, but has not received a response at press time.
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