According to a document on discussions inside the Australian markets regulator, the launch of FTX Australia around March 2022 raised concerns about return on investment promises.
On Monday, ASIC released 56 papers detailing an article about FTX’s debut in Australia. As revealed, FTX would provide traders with access to margin loans that may increase their cryptocurrency holdings by up to 20 times.
The Guardian previously reported on ASIC’s investigations.
On the evening of November 10, 2022, hours before FTX filed for bankruptcy protection in the U.S., FTX Australia called in administration, handing management to professional insolvency practitioners. Shortly after that, the Australian government took steps to increase crypto-related security. About thirty thousand consumers claim the exchange owes them money or bitcoin.
To counter ASIC’s claim that it lacked authority to interfere with FTX’s financial services licence, Australia’s Assistant Treasurer Stephen Jones pushed back in December 2022. According to Jones, ASIC has broad authority to revoke, amend, or replace an Australian Financial Services License.
ASIC has suspended the Australian financial services licence of FTX Australia Pty Ltd until 15 May 2023, after it was placed into voluntary administration on 11 November 2022. https://t.co/LCCf5JW33x
— ASIC Media (@asicmedia) November 15, 2022
According to ASIC’s spokeswoman, since March 2022, ASIC has been in touch with FTX Australia to inquire about the company’s financial services. Pricing, FTX Australia’s compliance with ASIC’s CFD product intervention order, and customer onboarding were some concerns voiced.
When external administrators were brought in for the Australian FTX firms, ASIC’s assessment of these problems was underway.