The Australian regulator raised concerns regarding FTX months before its collapse, according to a new report.

The Australian Securities and Investments Commission (ASIC) recently issued a statement expressing their concern about the operations of FTX, an online cryptocurrency exchange. This is significant news that sheds light on the ongoing debate surrounding digital asset regulation in Australia. As this is an evolving scenario with potentially far-reaching implications for stakeholders, companies and consumers alike, it is important to understand more about what ASIC have said regarding FTX’s operations and other pressing questions related to this situation. In this blog post, we’ll be exploring all of these questions in detail.

Australia’s financial regulator quickly expressed doubts about FTX Australia just months after its inception in March, according to official documents.

Eight months prior to its demise in November, the Australian financial regulator raised questions about FTX’s local branch. Unfortunately, their worries came true as the exchange eventually closed down.

In a report revealed by Guardian Australia, ASIC was alarmed about the operations of FTX Australia after it secured an Australian license through company takeover.

Bypassing the conventional degree of examination typically imposed on freshly-certified AFSL licensees, FTX Australia has been able to adeptly navigate around this obstacle. Joe Longo, ASIC Chairman, further attests to this feat.

Last month, the crypto exchange FTX started up operations and almost simultaneously they were served with a Section 912C notice from ASIC. This notice required them to provide information on their activities so that ASIC could determine if any of their actions went against AFSL license conditions. Documents acquired by us recently revealed this news

By providing a notification, ASIC can demand that the licensee provides documents revealing the details of their financial services and operations in order to verify whether they comply with “fit and proper person test” criteria.

After ASIC raised a few red flags, they kept FTX under close watch through their ‘surveillance activity’ and even sent out three notifications to the exchange. This was all confirmed in a briefing document acquired by The Guardian before FTX’s eventual collapse on November 11th.

Even in October, the document schedule showed that the regulator was mindful of FTX’s activities.

On November 11th, FTX Australia was among 130 associated firms that suspended their activities after its parent company ‘FTX’ commenced bankruptcy proceedings.

On the 16th of November, FTX’s Australian branch had its monetary permit suspended and was then driven into voluntary administration. It is predicted that roughly 30,000 Aussie consumers and 132 firms are owed either money or crypto from this exchange.

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