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With a declaration on July 19, the regulatory watchdog of Australia's financial market has brought the curtain down on FTX Australia's operations by revoking its financial license. FTX Australia, a subsidiary of the now-defunct cryptocurrency exchange, is left to tie up loose ends till July 12 of the following year.
Despite its dismal financial state, FTX Australia is still required to deliver specific financial services, most notably ensuring the compensation of its clients, as the regulators reminded. The ex-crypto exchange has a substantial client base of around 30,000 individuals and has offered services to 132 Australian companies.
Just last year in November, the Australian Financial Services (AFS) license of FTX Australia, a permit allowing it to establish derivatives and forex contracts for local clients, was put on hold by the Australian Securities and Investments Commission (ASIC). This decision followed closely on the heels of the parent company, FTX, headquartered in the Bahamas, filing for bankruptcy on November 11, 2022.
To help navigate the stormy seas of restructuring, voluntary administrators from Sydney's investment and advisory firm, KordaMentha, were called in on the very day of FTX's bankruptcy declaration. They were assigned to work with FTX Australia and its other subsidiary, FTX Express.
According to a recent report submitted to a US bankruptcy court by the restructuring lead of FTX's global entity, approximately $7 billion in liquid assets have been recovered so far. However, customer assets worth an estimated $8.7 billion are believed to have been inappropriately used.
There are murmurs of a possible resurrection of FTX, under a new identity, in the future. Its restructuring squad has been reportedly engaging in discussions with entities interested in financially supporting such a venture.
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