FTX Australia’s license suspended as 30K Aussies left in the lurch

Australia’s financial markets regulator has suspended FTX Australia’s financial license following the appointment of a voluntary administrator to help nearly 30,000 Australians and 132 Australian companies get their funds back from FTX.

The announcement was made by the Australian Securities and Investments Commission (ASIC) on Nov. 16 local time, which suspended the Australian Financial Services (AFS) license of FTX’s local entity until May 15, 2023.

Before its suspension, FTX Australia’s AFS license permitted it to create a market for derivatives and foreign exchange contracts to Australian-based retail and wholesale clients. Australian traders who signed up to trade digital assets were routed through FTX Australia.

FTX Australia has however, been permitted to provide limited financial services that strictly relate to the termination of existing derivative contracts with its clients until Dec. 19.

The suspension comes as John Mouawad, Scott Langdon and Rahul Goyal of Sydney-based investment and advisory firm KordaMentha were appointed as voluntary administrators to provide restructuring services to FTX Australia and its subsidiary FTX Express on Nov. 11.

KordaMentha will attempt to recoup the funds of nearly 30,000 Australian investors and 132 Australian companies due to the catastrophic FTX fallout, according to a Nov. 14 report in the Australian Financial Review (AFR).

The report added that FTX Australia employees have been cooperating with KordaMentha’s administrators to resolve the matter. FTX founder and former CEO Sam Bankman-Fried are listed as one of the three directors of FTX Australia.

The suspension of FTX Australia’s customer-facing operations comes nearly eight months after it was established on March 20, the firm also set up a Sydney-based office for its five employees.

Related: ‘Do not delay’ — ASIC warns Aussies to look for 10 signs of a crypto scam

Last wee130 firms tied to FTX including FTX US and its partner trading firm Alameda Research filed for Chapter 11 bankruptcy in the United States Code on Nov. 11, the same day that Bankman-Fried also resigned as FTX’s CEO.

ASIC noted that FTX Australia has the right to apply to the Administrative Appeals Tribunal to challenge ACIS’s decision.

Cointelegraph contacted ASIC and FTX for comment but did not receive a response by the time of publication.