Australia’s financial regulator cancels license for FTX’s local entity

July 19, 2023 Coin Telegraph

AFS

ASIC had previously suspended FTX's license to operate in Australia, now the securities regulator has canceled it entirely.

The Australian financial services regulator has finally canceled the financial license of FTX Australia, the bankrupt crypto exchange's local subsidiary — effective July 14.

On July 19, the Australian Securities and Investments Commission (ASIC) announced the cancellation, before noting that FTX Australia will still be allowed to provide limited financial services while it wraps up its dealings with clients until July 12 next year.

It would still be bound to make arrangements for compensating clients until that time, the regulator said. FTX Australia had around 30,000 retail clients and serviced 132 local companies.

In November 2022, ASIC suspended FTX Australia's Australian Financial Services (AFS) license which allowed it to create derivatives and foreign exchange contracts to local clients.

ASIC has cancelled the Australian financial services licence held by FTX Australia https://t.co/Gsmsg9XcYj
— ASIC Media (@asicmedia) July 19, 2023

The suspension came just days after the Bahamian-based FTX filed for bankruptcy on Nov. 11, 2022.

The same day as FTX's bankruptcy, voluntary administrators from the Sydney-based investment and advisory firm KordaMentha were appointed to assist in restructuring FTX Australia and a subsidiary, FTX Express.

In a report to a United States bankruptcy court last month, the restructuring chief for FTX's global entity said it had recovered around $7 billion in liquid assets but estimated a total of $8.7 billion worth of customer assets were allegedly misappropriated.

It's reported FTX could re-launch as an entirely new exchange, with its restructuring team holding talks with parties potentially interested in financially backing such a reboot.

Asia Express: China expands CBDC’s tentacles, Malaysia is HK’s new crypto rival

Australia bolsters crypto watchdogs in ‘multi-stage’ plan to fight scams

February 3, 2023 Coin Telegraph

Australian Competition and Consumer Commission

The new measures from the Australian government come as cryptocurrency scams skyrocketed 162% to $221 million in 2022.

The Australian government is bolstering its market regulator’s digital asset team as part of a “multi-stage approach” aimed at clamping down on crypto and ensuring proper risk disclosures from crypto firms.

A Feb. 2 joint statement by Australian Treasurer Jim Chalmers and Assistant Treasurer Stephen Jones explained that the new measures are aimed at protecting consumers dealing with cryptocurrency.

The treasurers said the multi-stage approach would involve three elements, including strengthening enforcement, bolstering consumer protection, and establishing a framework for its token mapping reform.

This is why we're taking action on crypto. pic.twitter.com/17HG5nhsTz
— Stephen Jones MP (@StephenJonesMP) February 2, 2023

One of the main changes will be an increase in the size of the Australian Securities & Investments Commission (ASIC)’s digital assets team and “upping enforcement measures.”

Chalmers and Jones said that ASIC would focus on ensuring that the risks to consumers from crypto products and service providers are appropriately disclosed.

Cointelegraph reached out to ASIC to find out how many additional positions will be filled but did not receive an immediate response.

Meanwhile, the government is set to give new tools to the Australian Competition and Consumer Commission (ACCC), the country’s competition watchdog, to protect consumers from crypto-related scams. It noted scam losses involving crypto payments totaled $221 million in 2022.

The new tool will come in the form of a real-time data-sharing tool that the ACCC will use to identify and prevent crypto scams.

Consumer protection will also be bolstered when a framework is finalized to regulate the licensing and custody of digital assets to “ensure consumers are protected from avoidable business failures or from the misuse of their assets by service providers.”

However, this framework will not begin until mid-2023, and will likely take considerable time before being implemented into legislation.

“The previous government dabbled in crypto policy but never took the time to future‑proof our regulatory frameworks to protect consumers and guide this new and emerging class of assets," the treasurers said, adding:

We are acting swiftly and methodically to ensure that consumers are adequately protected and true innovation can flourish.”

The Australian Treasury released its token mapping consultation paper on Feb. 2, which attempts to determine which elements of the cryptocurrency ecosystem will be regulated and to what extent.

Consultation open! Today we released the token mapping consultation paper. This consultation is part of a multi step reform agenda to develop an appropriate regulatory setting for the #crypto sector. Read paper & submit views @ https://t.co/4W2msjhP9B @ASIC_Connect @AUSTRAC pic.twitter.com/OGHuZEGvDp
— Australian Treasury (@Treasury_AU) February 2, 2023

The multi-stage approach plan was fast-tracked after the catastrophic collapse of FTX in November, which impacted over 30,000 Aussies and 132 Australian-based companies.

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

November 16, 2022 Coin Telegraph

Administrative Appeals Tribunal

Three members of a Sydney-based investment and advisory firm are assigned to help Australians impacted by the suspension of the local entity of Sam Bankman-Fried’s former crypto empire.

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 Mar. 20, the firm also set up a Sydney-based office for its five employees.

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.

Troubled Crypto Exchange FTX Files for Chapter 11 Bankruptcy Protection, CEO Steps Down

November 11, 2022 Bitcoin.com

FTX Australia

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