FTX Australia has been put into administration after its parent company, FTX Trading, failed to repay $US8 billion in customer funds after a dramatic run on its crypto exchange.
FTX Australia has been put into administration following a week when its Bahama-based parent company, FTX Trading,Headquartered in Sydney, administrators took control of FTX Australia on Friday and began examining the crypto exchange’s books to see whether there are enough assets to pay back local customers of the exchange.
Revelations have emerged this week that FTX Trading, the global crypto exchange founded and run by Sam Bankman-Fried, may have used more than $US6 billion in customer deposits to fund proprietary trading strategies through another company owned by Mr Bankman-Fried.Proprietary trading refers to a financial firm investing for its own profit rather than earning commission by trading on behalf of clients.Mr Bankman-Fried is one of the three directors of FTX Australia.
The Securities Commission of The Bahamas has taken action to freeze the assets of FTX Digital Markets. “We have been closely monitoring the situation that has been developing since Tuesday 8th November in relation to the operations of FTX,” a FTX Australia spokesperson said.
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