Australia Cancels License Of FTX's Local Subsidiary That Had Around 30,000 Clients

Australia's financial regulator has finally canceled the license of FTX Australia, the local arm of collapsed cryptocurrency exchange company FTX.

The Australian Securities and Investments Commission (ASIC) said the cancellation was effective from July 14. FTX Australia can still provide "limited financial services" for terminating existing derivatives with its clients until July 12, 2024.

"The cancellation has no effect on requirements for FTX Australia to continue as a member of the Australian Financial Complaints Authority, and to have arrangements for compensating retail clients," the regulator added in a press release Tuesday.

The subsidiary was serving around 132 local companies and had around 30,000 retail clients, reported Cointelegraph.

FTX Australia first saw its license suspended in November last year. The suspension blocked the exchange from dealing in derivative and foreign exchange contracts with both retail and wholesale clients. The action came days after FTX's Chapter 11 bankruptcy protection filing.

Australia's securities regulator previously appointed advisory firm KordaMentha as administrators to help in restructuring FTX's Australian arm and its subsidiary, FTX Express, which operates a digital currency exchange that is not under ASIC's regulatory oversight.

Australia isn't the only country to revoke an FTX license as the UAE's Virtual Assets Regulatory Authority (VARA) also suspended the company's license to serve customers in November.

The same month, FTX EU, the exchange's European Arm, had its license suspended in Cyprus. It was announced just around two months after FTX secured the license that allowed it to "serve the whole European Economic area."

FTX continues to grapple with the aftermath of its collapse in November.

Its disgraced co-founder and former CEO Sam Bankman-Fried is facing multiple fraud-related charges and bribery. A U.S. judge denied Bankman-Fried's motions to dismiss some of the charges against him last month. Bankman-Fried's trial is set for Oct. 2.

Ryan Salame, a former FTX executive who blew the whistle on the crypto exchange giant, is also reportedly under federal investigation for alleged illegal donations for his girlfriend's congressional campaign.

Daniel Friedberg, FTX's former chief compliance officer and the general counsel of FTX's sister company Alameda Research, was sued by the new FTX management for allegedly assisting Bankman-Fried in committing fraud. Friedberg is also accused of paying "hush money" to whistleblowers.

The new FTX leadership is now moving to get back funds that the former management allegedly donated to various individuals and entities, including donations reportedly made to politicians.