Сollapse of FTX was foreseen by Australian regulator
2023.01.30 03:23
Сollapse of FTX was foreseen by Australian regulator
By Tiffany Smith
Budrigannews.com – FTX’s local Australian subsidiary was reportedly the subject of concerns from Australia’s financial regulator prior to the exchange’s premature demise in November.
Guardian Australia obtained documents indicating that because FTX Australia was able to obtain a license in the nation through a company takeover, officers of the Australian Securities and Investments Commission (ASIC) were concerned about the manner in which the company was operating.
According to a previous Cointelegraph report, FTX acquired its Australian financial services license (AFSL) by purchasing IFS Markets in December 2021 and launching operations in March 2022.
According to its ASIC chief Joe Longo, this allowed FTX Australia to effectively avoid the same level of scrutiny that is typically placed on new AFSL licensees.
According to newly obtained documents, the regulator reportedly sent FTX a Sect 912C notice the same month it started operating. This notice required the crypto exchange to provide documents regarding its operations so that ASIC could determine whether or not it met the requirements for an AFSL license.
ASIC can use the notice to ask the licensee to provide documentation describing the financial services they offer, the financial services business they run, and whether or not they pass the “fit and proper person test.”
The outlet was also able to obtain a briefing document that confirms that the regulator placed the exchange under “surveillance activity” for three months prior to the exchange’s collapse on November 11.
Additionally, the schedule of the documents reveals that the regulator was still concerned about the operations of FTX as late as October 2022.
Related: As it sues BPS Financial over a crypto promotion, ASIC issues a warning to the industry. FTX Australia was one of more than 130 FTX-linked businesses that ceased operations on November 11, 2022, when its parent company FTX filed for bankruptcy.
On November 16, 2022, the Australian subsidiary of FTX had its financial license suspended and entered voluntary administration.
The exchange owes money or crypto to about 30,000 Australian customers and 132 businesses.
