FTX’s Australian entities enter administration
Troubled global cryptocurrency exchange FTX has appointed administrators to the two Australian entities associated with the group, which is facing imminent collapse after rival operator Binance scrapped its buyout deal.
FTX Australia and FTX Exchange on Friday appointed administrators from KordaMentha, who plan to work through the weekend sifting through the books and records of FTX’s local companies.
The news of the Australian entities calling in insolvency specialists to review its business comes as the group’s US-based founder Sam Bankman-Fried told FTX.com investors that without a cash injection, the company would need to file for bankruptcy, according to a report from Bloomberg. Bankman-Fried has estimated the global group is facing a shortfall of $US8 billion ($12.1 billion).
The collapse of the deal has ravaged cryptocurrency markets, slicing more than 20 per cent off the price of bitcoin and prompting a collapse in the value of other cryptocurrencies.
Sources close to FTX, who declined to be named because they were not permitted to speak for the company now that it has entered administration, said a considerable amount of deposits were being held in the Australian entities on behalf of clients.
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They suggested it was too soon to say whether the full amount of deposits had been kept on hand.
FTX this week advised that it had liquidity issues within various entities associated with the company’s non-US businesses. The FTX sources suggested it could be the case that Australian customers of FTX will receive less than 100 cents in the dollar on their deposits given the global group’s financial troubles.
According to KordaMentha, the directors of FTX Express and FTX Australia made the decision to appoint KordaMentha at a board meeting on November 11, 2022.
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