Concerns about FTX were raised by an Australian regulator months before it went down:

Eight months before the exchange went bankrupt in November, Australia’s financial regulator reportedly raised concerns about FTX’s local Australian subsidiary.

According to documents obtained by Guardian Australia, the Australian Securities and Investments Commission (ASIC) was worried about how FTX Australia was running after it got a licence in the country through a company takeover.


A previous report from Cointelegraph said that FTX got its Australian financial services licence (AFSL) by buying the financial company IFS Markets in December 2021. A few months later, in March 2022, it opened for business.

Joe Longo, the head of ASIC, says that this meant FTX Australia didn’t have to go through the same level of scrutiny that is usually given to new AFSL licensees.

Related: A new crypto software company gets $5 million from the former president of FTX US.

According to the new documents, the regulator sent a Section 912C notice to FTX the same month it started doing business. The notice asked the crypto exchange to give information about how it worked so that ASIC could decide if it met the conditions of its AFSL licence.

With this notice, ASIC can ask the licensee to show proof of what financial services it offers and what kind of financial services business it runs. This will help ASIC decide if the licensee meets the “fit and proper person test.”

A briefing document that the Guardian got confirmed that between ASIC’s first worries and the collapse of FTX on November 11, the regulator put the exchange under “surveillance activity” and sent it three notices.


The document schedule also shows that the regulator was still worried about FTX’s operations as late as October.

Cointelegraph asked ASIC for a comment but did not hear back before going to press.

After its parent company, FTX, filed for bankruptcy on November 11, more than 130 companies that were linked to it stopped doing business.

Related: Customers outside the US who use FTX want private information taken out of bankruptcy filings.

The Australian branch of FTX had its financial licence taken away on November 16 and has gone into voluntary administration, which is like Chapter 11 bankruptcy in the U.S.

It is thought that the exchange owes money or cryptocurrency to about 30,000 Australian customers and 132 companies.



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