The Chapter 11 Bankruptcy Deposition of the FTX Group around FTX Trading Limited in the United States also affects the Australian subsidiaries, the ASIC-regulated FTX Australia Pty Ltd and FTX Express Pty Ltd. The companies have placed themselves under voluntary administration, ASIC has suspended their license. Also on U.S. Chapter 11 deposition is AUSTRAC-registered Hive Empire Trading Pty Ltd, which operates OTC crypto broker HiveEX.
The Fred Schebesta Deal
Australian OTC crypto broker HiveEX was founded in 2018 by Fred Schebesta, who is considered the Australian King of Crypto. In August 2020, FTX acquired HiveEx, but no purchase price was mentioned. Currently, there is no mention of Chapter 11 Bankruptcy Proceeding and the potential impact on customers on HiveEX‘s website.
Acquisition Of A Forex Broker
As recently as March 2022, Sam Bankman Fried‘s FTX Group announced the opening of FTX Australia Pty Ltd through the acquisition and renaming of ASIC-regulated forex and CFD broker IFS Markets Pty Ltd. On November 11, 2022, the two Australian FTX Entities placed themselves under voluntary administration. The administration will be carried out by the consulting firm KordaMentha.
On 16 November 2022, ASIC announced that it had suspended the license of FTX Australia Pty Ltd (AFS license 323193). Until 19 December 2022, FTX Australia can continue to provide limited financial services that relate to the termination of existing derivatives with clients.
Side note: The domain of the broker IFS Markets (www.ifsmarkets.com) was redirected to the offshore broker Decode (www.decodeFX.com) after the acquisition by FTX.
Buying Regulatory Permissions
FTX has also used a similar license acquisition pattern in Cyprus, where they acquired CySEC-regulated K-DNA Financial Services Limited and renamed it FTX (EU) Ltd. According to a Reuters report, FTX spent some $2 billion on “acquisitions for regulatory purposes.” It also bought LedgerX LLC, a futures exchange, which gave it three U.S. CFTC licenses in one swoop.
FTX Group did not disclose the purchase prices for the acquisitions of the regulated firms in Cyprus and Australia, nor did it disclose any other details about the transactions.
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