According to records, Australia’s financial regulator had concerns about FTX Australia not long after it began operations in March 2022.
The Australian financial authority expressed concerns about FTX’s local Australian affiliate up to eight months before the exchange’s sad demise in November.
According to papers acquired by Guardian Australia, ASIC investigators were worried about how FTX Australia was functioning since it was able to secure a license in the nation through a corporate acquisition.
According to a recent Cointelegraph story, FTX obtained its Australian financial services license (AFSL) by acquiring financial firm IFS Markets in December 2021 before starting business months later, in March 2022.
According to its ASIC chief, Joe Longo, this has allowed FTX Australia to essentially avoid the same amount of scrutiny that is generally accorded to new AFSL licensees.
According to recently released papers, the regulator allegedly sent a Sect. 912C notice to FTX the same month it began operations, requiring the crypto exchange to disclose data regarding its activities so that ASIC could determine if it matched AFSL licensing terms.
ASIC can use the notice to request the license to deliver documentation outlining the financial services they provide, the financial services business they operate, and whether the licensee meets the “fit and suitable person test.”
A briefing paper acquired by the publication also indicated that in the months between the initial worry and FTX’s collapse on Nov. 11, the regulator placed the exchange under “monitoring activities” and sent three notifications to FTX.
According to the document timeline, the regulator was still worried about FTX’s operations as late as October 2022.
ASIC was contacted for comment by Cointelegraph but did not respond before publishing.
FTX Australia was one of more than 130 FTX-related firms that ceased operations when its parent company, FTX, declared bankruptcy on November 11, 2022.
On November 16, 2022, the Australian subsidiary of FTX had its banking license terminated and went into voluntary administration.
It is believed that about 30,000 Australian clients and 132 businesses are owed money or cryptocurrency by the exchange.