FTX loses financial services license access in South Africa
South African cryptocurrency company, Ovex has removed FTX as a juristic representative, cutting off its access to its local Financial Service Provider (FSP) license.
By Anna B Kiwanuka
Ovex, a cryptocurrency enterprise based in South Africa, has canceled and removed FTX as a juristic representative, cutting off the international exchange’s access to its local Financial Service Provider (FSP) licence.
“FTX is now unlicensed to market its services in South Africa. People should avoid using FTX.” Ovex community manager, Nick Bergonzoli stated.
FTX and Alameda Research invested in cryptocurrency and blockchain businesses around the world, including several exchanges in South Africa. These include VALR, the largest exchange headquartered in Africa, and Ovex, a market maker that reports trading volumes of over $500 million (R8.6 billion) per month.
FTX bought a stake in Ovex in April 2021.
With Ovex’s help, FTX was able to continue offering its margin trading services to South African users. However, this authority has now been withdrawn.
Ovex stated, “FTX’s marketing activities in South Africa had in the past been regularised through its appointment as juristic representative of Ovex Fsp (Pty) Ltd, FSP no. 50776. The public is now cautioned from doing further business with FTX, as FTX is not permitted to market its offshore derivatives products in South Africa, at this time.”
Ovex CEO Jonathan Ovadia also stated last week that FTX owns a minority stake of around 8% and that they are in discussions to buy the equity back. He also assured that they have no exposure to FTT, and moved any operations they had on the exchange off by 7 November.
The crypto market maker also announced on 16 November, that it terminated its relationship with FTX in the lead-up to the bankruptcy proceedings. Additionally, Ovex stated that FTX’s authority to market and make available its offshore derivatives products in South Africa was withdrawn, effective November 2022.
FTX is a cryptocurrency exchange founded by Sam Bankman-Fried in 2019, which filed for Chapter 11 bankruptcy in the United States last week.