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Australia’s financial authority suspends FTX Australia license

Australia’s financial services authority suspended the financial license of FTX Australia, the local entity of the bankrupt cryptocurrency exchange.

The cancellation was notified on July 19 by the Australian Securities and Investments Commission, and it became effective on July 14. FTX Australia will still be permitted to offer a few restricted financial services while it closes its business with customers through July 12 of the coming year.

The regulator stated that it would still be required to make plans for compensating clients up until that time. Around 30,000 retail clients and 132 regional businesses were served by FTX Australia.

ASIC terminated FTX Australia’s Australian Financial Services (AFS) license in November, which had permitted the company to generate derivatives and foreign exchange contracts for local customers.

Australia's financial authority suspends FTX Australia license
Australia’s financial authority suspends FTX Australia license

The suspension occurred just a few days after the Bahamas-based FTX declared bankruptcy on November 11, 2022.

The Sydney-based investment and consultancy firm KordaMentha was hired as voluntary managers on the same day that FTX filed for bankruptcy to help restructure FTX Australia and a subsidiary, FTX Express.

The restructuring director for FTX’s worldwide entity claimed in a report to a US bankruptcy court last month that while the company had recovered almost $7 billion in cash assets, a total of $8.7 billion in customer funds were allegedly misused.

According to rumours, FTX may relaunch as a whole new exchange. Its restructuring team is reportedly in talks with parties that would be willing to provide financial support for such a reboot.

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