ASIC cancels FTX Australia’s license amid escalating crypto regulation

According to a statement released on July 19, the Australian Securities and Investments Commission (ASIC) canceled the Australian Financial Services (AFS) license held by FTX, a subsidiary operating in Australia, on July 14.

The license cancelation does not impact FTX Australia’s arrangements to compensate its retail clients and its continued Australian Financial Complaints Authority membership. The exchange could also provide limited financial services for terminating existing derivatives with clients before July 12, 2024.

FTX Australia serviced 30,000 customers

Before its license cancellation, FTX Australia serviced around 30,000 customers, making it one of the largest crypto platforms in the country.

Eight months before its collapse, in March 2022, ASIC had already begun raising concerns about FTX Australia’s operations. At the time, the regulator placed the exchange under “surveillance activity” based on concerns that it side-stepped the scrutiny of issuing new licenses.

The regulator would later suspend the exchange’s AFS license when it entered into voluntary administration in November.

Meanwhile, two entities are reportedly related to the bankrupt exchange in Australia, including FTX Australia. The two firms hold around $42 million in customer funds.

Australia’s increasing crypto regulation efforts

The license cancellation of FTX Australia forms part of the Australian government’s broader efforts to regulate the crypto industry increasingly.

In April, the ASIC conducted a compliance review of the financial services business of Binance under local laws and reportedly searched the platform’s office earlier this month. Binance had abruptly cancelled its derivatives license with the regulator, citing compliance with local laws.

Meanwhile, several Australian banks, including Westpac, National Australian Bank (NAB), and others, have lately been restricting payments to crypto exchanges as part of efforts to reduce their customer exposure to scams.

The banks described cryptocurrency scams as one of the fastest-growing security threats in the country.

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