ASIC suspends licence of failed crypto platform after bankruptcy call

Australia’s corporate regulator has suspended the licence for failed cryptocurrency exchange FTX after the US company filed for bankruptcy.

Nov 16, 2022, updated Nov 16, 2022
FTX Ceo Sam Bankman-Fried. (Image: blockchainmedia)

FTX Ceo Sam Bankman-Fried. (Image: blockchainmedia)

ASIC announced on Wednesday the financial services licence for FTX Australia would be put on hold until May 2023 after the offshoot was put into voluntary administration.

Administrators were appointed to FTX Australia and a subsidiary after their international holding company filed for bankruptcy on Friday.

The hyped crypto exchange, once valued at $US32 billion ($A47 billion), imploded after traders attempted to pull $US6 billion ($A8.9 billion) from the troubled platform and a rescue deal with rival Binance fell through.

US bankruptcy filings show FTX could have more than one million creditors as multiple regulators probe its financial dealings.

“FTX faced a severe liquidity crisis that necessitated the filing of these cases on an emergency basis last Friday,” the court filing said.

In a statement, ASIC said it was “monitoring this situation closely and speaking regularly with international regulators and the external administrators”.

The regulator also urged Australian FTX clients to carefully monitor developments at the company.

Administrators KordaMentha told customers on Friday not to deposit any further funds with the company or execute any trades until further notice.

FTX had sponsored a series of major events, including a partnership with the International Cricket Council that led to its branding featuring at the T20 World Cup in Australia before the agreement was suspended.

It also sponsored Australian Blockchain Week in March.

The value of cryptocurrencies, including bitcoin, has plunged after news of the collapse of the exchange as fears spread about the financial security of the sector.

-with Reuters

Local News Matters
Copyright © 2024 InQueensland.
All rights reserved.
Privacy Policy