Australian Regulator had Internally Raised Concerns on FTX

Australia's markets regulator internally discussed FTX's launch in Australia around March 2022 raising concerns around return on investment claims, according to a document by the regulator.

56 documents published by the Australian Securities and Investments Commission (ASIC) on Monday, revealed that ASIC had flagged an article by the Australian Financial Review about FTX's Australia launch. The article had said FTX would allow traders to buy crypto assets with margin loans up to 20 times their investment.

The Guardian had earlier reported on ASIC's enquiries.

FTX Australia called in administrators, the process of handing over control to licensed insolvency practitioners, hours before FTX filed for bankruptcy protection in the United States on Nov. 11, 2022. Australia's government made moves to tighten safety around crypto shortly after. The exchange owes around 30,000 customers cryptocurrency or money.

In December 2022, Australia's Assistant Treasurer Stephen Jones pushed back against ASIC's suggestion that it lacked the power to intervene on the financial services licence of FTX. ASIC already had “extensive powers” to suspend, cancel or vary an Australian Financial Services Licence, Jones said.

"Since March 2022, ASIC had made enquiries with FTX Australia about the financial products offered by FTX Australia. The issues raised included pricing, FTX Australia’s compliance with ASIC’s CFD product intervention order and its on-boarding of clients," an ASIC spokesperson said.

"ASIC’s review of these matters was on-going as at the time that external administrators were appointed to the Australian FTX entities," the spokesperson added.

Read More: The Collapse of the FTX Empire