Australian regulator voiced concerns about FTX six months before its collapse

The Australian Securities and Investments Commission (ASIC) was concerned about the operations of FTX’s local subsidiary and was watching the company closely well before its collapse. The Guardian Australia reports this, citing documents.

In March 2022, FTX opened an Australian subsidiary by acquiring a company with a AFSL. In November, ASIC suspended the licence following the exchange’s collapse.

According to documents, regulator chair Joe Longo believed that, even before the FTX collapse, the acquisition had allowed the group to bypass the level of scrutiny typically applied to new AFSL licensees.

According to media reports, ASIC had asked the exchange to provide information about its activities to assess compliance with the obtained licence as early as March 2022. The documents mention three such notices and the regulator’s ‘surveillance activity’ in relation to FTX.

The operator of the bitcoin exchange has more than one million creditors, according to court documents. Among them are about 30,000 Australian clients with assets of up to $1 million. Bloomberg deemed unlikely that funds would be returned.

Among FTX’s creditors were Apple, Google, Amazon, Netflix, Meta, Microsoft and other tech giants.

In January 2023, U.S. federal prosecutors seized assets worth $697 million from the exchange’s founder Sam Bankman-Fried.

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