Aussie Regulator Terminates FTX Australia’s License

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The Aus­tralian Secu­ri­ties & Invest­ments Com­mis­sion (ASIC) sus­pend­ed the FTX Aus­tralia license until May 15, 2023, fol­low­ing the exchange’s recent fiasco.

The crash has affect­ed around 30,000 Aussie con­sumers who are explor­ing how to retrieve their funds.

The Latest Strike on FTX

Despite the ter­mi­na­tion of its license, FTX’s Aus­tralian sub­sidiary will be able to pro­vide lim­it­ed ser­vices to local cus­tomers until Decem­ber 19, 2022.

The ASIC remind­ed that the cryp­to exchange had per­mis­sion to “pro­vide gen­er­al advice relat­ing to deriv­a­tives and for­eign exchange con­tracts to retail and whole­sale clients.” The melt­down of FTX, though, changed the trends, and the reg­u­la­tor had to take severe mea­sures to pro­tect domes­tic users.

“ASIC is mon­i­tor­ing this sit­u­a­tion close­ly and speak­ing reg­u­lar­ly with inter­na­tion­al reg­u­la­tors and the exter­nal admin­is­tra­tors. ASIC encour­ages clients of FTX Aus­tralia to care­ful­ly mon­i­tor the sit­u­a­tion and look out for updates by the FTX Group, as well as from FTX Australia’s admin­is­tra­tors,” the agency alerted.

The sus­pen­sion comes a few days after the author­i­ties appoint­ed John Mouawad, Scott Lang­don, and Rahul Goy­al (part of the advi­so­ry firm Kor­da­Men­tha) to help local vic­tims restore some of their assets after the crash.

A recent cov­er­age informed that at least 30,000 Aus­tralians and over 130 com­pa­nies had suf­fered loss­es due to the crisis.

The Domino Effect

The col­lapse of Sam Bankman-Fried’s cryp­to plat­form has sent shock waves through the entire sec­tor. The dig­i­tal asset mar­ket plunged way below $1 bil­lion, while most coins lost a sig­nif­i­cant chunk of their val­ue (bit­coin being down around 10% for the past week).

Con­cerned about their funds stored in oth­er exchanges, many indi­vid­u­als start­ed with­draw­ing en mass. As Cryp­toPota­to report­ed, more than $8 bil­lion worth of cryp­to has depart­ed from trad­ing venues between Novem­ber 6 and Novem­ber 14.

Lead­ing enti­ties in the field dis­played their audit­ed proof of reserves to cus­tomers to show max­i­mum trans­paren­cy and reduce the catastrophe’s impact. Some went even fur­ther, intro­duc­ing recov­ery funds that could help clients in case of an emergency.

Binance – the world’s largest cryp­to exchange – topped up its Secure Asset Fund for Users (SAFU) to $1 bil­lion, while OKX vowed to dis­trib­ute $100 mil­lion across affect­ed projects and such that are will­ing to migrate from Solana.

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