How to get an Australian license without verification
2022.12.06 01:14
How to get an Australian license without verification
Budrigannews.com – The chairman of the Australian Securities and Investments Commission (ASIC), Joseph Longo, is urging the closure of a regulatory loophole that allowed FTX to obtain an Australian Financial Services License (AFSL) without passing all of the necessary checks.
The Australian Financial Review reported on December 5 that Longo made the remarks while addressing a joint parliament committee on corporations and financial services on Monday local time.
The recent meltdowns of FTX and Alameda Research, both of which were led by the troubled founder Sam Bankman-Fried, were, of course, a major topic that the committee investigated.
When Longo was questioned about how and why the regulator let FTX acquire an AFSL under its supervision, he said that a regulatory loophole prevented ASIC from intervening or performing the necessary checks.
When FTX took over IFS Markets in December 2021, it reportedly was able to circumvent the standard procedure for obtaining an AFSL, effectively giving it access to its license. In March 2022, FTX Australia began operations.
According to Longo, this loophole denies ASIC the legal authority to examine corporations in the same manner as new licensees.
FTX “purchased [its AFSL] off a current permit holder. Under current legal game plans, it is something typical to do,” Longo said, adding: ” We were informed of that position, but trading someone else’s license is simple.
Longo also said that ASIC had specifically asked the previous government, which was led by Scott Morrison, to fill this regulatory gap, but the problem was never fixed.
ASIC can only look at a company from the front when it applies for a new AFSL to see if it has adequate capital controls and compliance measures in place.
In response, Senator Deborah O’Neill emphasized that the loophole that allows FTX to essentially obtain ASIC approval without the regulator conducting an investigation is a concerning prospect for Australian consumers.
“In addition to trading of crypto in and of itself, just because you have an AFSL ticked off by ASIC, there is no guarantee there is integrity?”
Corporate governance has been sparse or absent from FTX. We are discussing a genuine cattle rustler who came in, followed through on the cost [for an AFSL] … An AFSL was ticked off all things considered, from ASIC … be that as it may, there is colossal gamble here,” she added.
