The Australian Securities & Investments Commission (ASIC) announced late Tuesday that it had suspended the Australian financial services license of FTX Australia until May 15, 2023. The agency had previously placed the local FTX affiliate in voluntary administration on November 11, 2022, the same day that FTX filed for Chapter 11 bankruptcy protection.

FTX Australia's suspension is the latest domino to fall in the catastrophic collapse of Sam Bankman-Fried's once-prominent empire.

FTX Australia was not included in the Chapter 11 filing, but it did encompass algorithmic trading firm Alameda Research, FTX.US, and 130 affiliated entities. Also left out of the bankruptcy declaration were FTX Express Pay Ltd., Ledger X LLC, and FTX Digital Markets Ltd.


"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 on the KordaMentha website," the agency said.

FTX launched FTX Australia in Sydney in March 2022.

"We're excited to bring FTX's innovative products and services to the Australian marketplace," then-CEO Sam Bankman-Fried said at the time. "The establishment of FTX Australia should provide all our local clients with the confidence of trading on a registered and licensed platform."

Considering the alleged activities of Bankman-Fried and other FTX executives, Australian authorities have good reason to suspect something was amiss. A lapse in Australia's regulations did not help matters.

As reported by the Australian Financial Review, the island nation has no custody rules regarding digital asset exchanges, meaning there was no requirement for FTX Trading to keep customer assets onshore.


In August, the Australian treasury announced plans to establish a regulatory framework for cryptocurrencies that was described as more thorough than that of other countries. Whether the framework would have anticipated or avoided the fallout of the collapse of FTX is unknown.

On the day FTX filed for bankruptcy, ASIC appointed voluntary administrators for FTX Australia and its subsidiary FTX Express Pty Ltd., which the agency says it does not regulate.

Australian regulators say FTX Australia can continue providing limited financial services related to the termination of existing derivatives with clients until December 19, 2022.

"ASIC is monitoring this situation closely and speaking regularly with international regulators and external administrators," the agency said. "FTX Australia may apply to the Administrative Appeals Tribunal for a review of ASIC's decision."

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