Global fall of cryptocurrency graph - FTT token fell down on the chart crypto exchanges on app screen.

Australia revokes FTX subsidiary’s license

Getting your Trinity Audio player ready...

Australia’s securities regulator has revoked the license of FTX Australia, the defunct exchange’s local subsidiary.

The Australia Securities and Investments Commission (ASIC) announced this week that it has canceled the Australian financial services (AFS) license issued to FTX.

ASIC will allow FTX Australia to continue providing limited financial services relating to terminating existing derivatives with clients until July 21, 2024. As a member of the Australian Financial Complaints Authority, the exchange can also keep at its client compensation arrangements.

ASIC first suspended FTX Australia’s AFS license on November 14, 2022, just days after Sam Bankman-Fried filed for bankruptcy. The suspension period was to end on May 15, but it was extended to July 24.

The cancellation comes as KordaMentha, the local firm charged with administration for the local exchange, told investors it would seek to recover $240 million from the global parent exchange’s insolvency process. The firm claims this is the amount 30,000 local investors lost to FTX Australia.

KordaMentha has submitted non-customer claims on behalf of Australian clients to John J Ray III, the U.S. bankruptcy specialist overseeing FTX’s insolvency process.

“Broadly speaking, these indemnities cover the loss suffered by the companies or its customers because of any act or omission of FTX Trading,” KordaMentha told local creditors on Thursday.

The firm has already recovered $29 million from FTX Australia and FTX Express—the former offered derivative products while the latter allowed users to purchase digital assets with fiat. It’s working out a plan to return the funds to users.

KordaMentha has, however, warned investors that not all Aussies qualify as local creditors. Some, it says, must submit their claims in the Chapter 11 bankruptcy proceedings for the global company FTX Trading.

Nine months later, the FTX saga continues to unfold and suck in more companies and individuals. The latest to be sucked in is Dan Friedberg, the former FTX attorney who, according to recent court filings, was SBF’s “fixer” and paid millions of dollars to whistleblowers.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups— from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple,
EthereumFTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.