FTX loses its license in Australia until May 2023
In light of FTX’s disclosure of its liquidity crisis, the business has no room to recover as it continues to suffer reputational damage around the world. As a result of a recent turn of events, the Australian Securities and Investments Commission (ASIC) has decided to put a suspension on the offerings of FTX Australia Pty Ltd until May 2023. The platform may continue to offer limited financial services until December 19, 2022, so that its users are not abandoned in the wilderness.
On November 11, 2022, Voluntary Administration was declared for FTX Australia. Scott Langdon, John Mouawad, and Rahul Goyal were subsequently appointed as voluntary administrators. They are now responsible for auditing all of the venture’s unregulated digital assets.
ASIC is keeping an eye on developments and is communicating with counterparts in other countries. Users should keep an eye on the situation and stay alert for further developments.
At the time of drafting this article, it is learned that FTX Australia and other affiliated companies have commenced a proceeding under Chapter 11 of the United States Bankruptcy Code. There is a lesson to be learned for every cryptocurrency exchange in Australia following the suspension of FTX Australia. On a macro scale, unregulated assets and a liquidity crunch have serious repercussions from the government.
Binance had previously signaled its plan to purchase FTX’s non-US operations and advocate on behalf of its customers. Binance backed out of the transaction after multiple news stories and the completion of the due diligence process. Concerns centered mostly on the misuse of customer funds and financial regulators’ investigations.
FTX was in negotiations with its investor to raise up to $8 billion in the capital. While developments are sought, there is currently no breathing room for FTX, as the crisis has affected the whole cryptocurrency business. Bitcoin has dropped to $16,853.30, while Solana continues to walk approximately $13.
The crypto exchange was founded in 2019, with its headquarters in Hong Kong. More pieces of information related to the venture can be accessed through an FTX exchange review. Despite being a global success in the sector, it has collapsed due to a liquidity issue, causing traders to panic because they cannot withdraw funds from the platform.
To preserve the remainder of its credibility, FTX must urgently meet the growing demand for withdrawals if it wants to retain any remaining credibility.
Designed primarily for retail and institutional investors, FTX has always aimed to give traders greater portfolio diversification capabilities. Sam Bankman-Fried currently leads the platform.
FTX has recently lost its license in Australia, indicating that the next five to six months will be difficult. It will take a great deal to recover, beginning with allowing traders to withdraw their funds and sufficient liquidity on the platform. The crisis, for now, continues to deepen for FTX.