The Australian Securities and Investments Commission (ASIC) has recently taken action against FTX’s Australian entity by announcing the cancellation of its Australian Financial Services (AFS) license.
The bankruptcy of FTX last November prompted the initial suspension of the license until May, which restricted the exchange from dealing in derivative and foreign exchange contracts for retail and wholesale clients in Australia. However, ASIC reinstated the license to assist in unwinding trading positions and identifying customer funds.
FTX Australia, with its 30,000 retail clients and 132 domestic company services, will still be allowed to provide limited financial services during the winding-up period until July 12, 2024. ASIC has emphasised that the cancellation will not affect FTX Australia’s Australian Financial Complaints Authority membership or its responsibility to compensate retail clients.
The decision to cancel the AFS license aligns with the intensified scrutiny of the crypto industry in Australia following FTX’s collapse. While ASIC did not explicitly cite FTX as the reason, they mentioned their intention to crack down on scams in the country. Other actions include Westpac banning its users from making payments to Binance in May and the Australian Prudential Regulation Authority (APRA) instructing banks to disclose their exposure to crypto-related ventures and start-ups to assess potential risks.
In response to the regulatory measures, the Commonwealth Bank of Australia (CBA), the country’s largest bank, temporarily suspended “certain” payments to crypto exchanges last month.