- Australian regulators were worried about FTX months before it collapsed, according to Guardian Australia.
- The outlet revealed that the way in which FTXC secured its license concerned ASIC
- FTX had around 30,000 Australian customers when it collapsed
Australian regulators were worried about FTX months before it collapsed, according to Guardian Australia. The outlet obtained documents showing that the Australian Securities and Investments Commission (ASIC) grew concerned over the exchange’s operations after obtaining a license via a company takeover. FTX acquired its Australian financial services license by taking over IFS Markets in Dec 2021 and started operations in March 2022, effectively sidestepping the same level of scrutiny that is usually applied to new licensees.
ASIC Monitored FTX Prior to Collapse
ASIC issued a Section 912C notice to FTX within a month of its operations, requiring the exchange to provide information for assessment of AFSL license conditions. The notice enables ASIC to direct FTX to provide documents on its financial services and operations to determine if it meets the “fit and proper person test.”
According to a briefing document obtained by Guardian Australia, ASIC monitored FTX through “surveillance activity” and issued three notices to it before its closure on Nov 11.
30,000 Customers Impacted
ASIC was still concerned over FTX’s operations as late as October, just weeks before the platform closed. FTX’s Australian subsidiary had its financial license suspended on November 16 and entered voluntary administration, similar to a Chapter 11 bankruptcy in the US.
Around 30,000 Australian customers and 132 firms are owed money or cryptocurrency assets by FTX. ASIC doesn’t have a great record in protecting crypto participants, given that Countinghouse, which folded in late 2019 after being revealed to have been a scam, was registered with the agency, which offered no help to victims after the collapse.