It has emerged that the once-thriving FTX exchange had been subject to open inquiries from the Australian Securities and Investments Commission (ASIC) since March 2022.

With over 30,000 Australian investors seeking to reclaim their individual deposits of up to $1M (AUD). Questions are surfacing about ASIC’s role in investigating market misconduct at FTX ahead of the firms’ implosion on November 12.

Emails shown by the Guardian confirm FTX was under active surveillance amid ongoing inquiries into the exchange’s activities.

The documents reveal serious concerns about asset pricing and compliance with the Australian Financial Services Licence (AFSL) that enabled dealings with Australian clients.

Investigations began in March 2022 after FTX promoted margin loan trading with up to 20x leverage for the Australian market.

Unable to access expected key documents associated with an ASFL, investigators held a teleconference with FTX on March 30.

During the call, FTX highlighted compliance with international financial regimes – going so far as to boast possessing 31 financial service licenses.

The March meeting ended with reassurances from FTX that they would work with regulators [on fighting crypto scams], and further assist Australian police investigations into crypto-related crime.

In April, the ASIC issued an ‘S912C Notice’ to access information and documents pertinent to compliance with ASFL license requirements.

During the next 6 months, ASIC sent 3 notices to FTX. And banded around two emails entitled ‘FTX Australia Pty LTD – Summary of Current Concerns’ ahead of the exchange collapse.

Serious questions engulf Australian regulators’ investigation into FTX

Major questions emerge from the revelations about the ASIC investigation. Chiefly, could financial regulators have done more, or acted sooner, to protect Australian investor’s deposits?

The FTX saga has put pressure on regulators worldwide to address cryptocurrencies. In the wake of this investigation, Australian legislators will likely press ahead with plans to introduce a crypto regulatory regime this year.

But how did FTX get the ASFL they used to reassure investor confidence in the first place?

The answer sits at the start of the investigation: the missing key documents that sparked ASIC interest in FTX.

ASIC was unable to find these documents because they never existed.

FTX was able to get the ASFL license through the acquisition of IFS Markets (an online FX trading platform). IFS itself acquired the ASFL by buying a firm called Forex Financial Services.

WATCH: Jason Guthrie, Head of Digital Asset Product for WisdomTree, on FTX Bankruptcy

Similar moves were made by Alameda (FTX’s sister firm) to access banking services and receive AUD deposits.

In 2020, Alameda acquired OTC payment service HiveEx (which operated a payment processor called HiveSpend) for $300,000 AUD.

HiveEx itself held a stake in Australian bank Goldfield’s Money, acquired as part of plans to open Australia’s first crypto bank.

Using HiveEx, Alameda was able to appoint Sam Bankman-Fried as Director and open the doors for customers to deposit AUD with FTX. Yet by May 2022 (after ASIC investigation onset), customers reported a change in the PAYID, indicating HiveEx was no longer in use from this point.

Later, Goldfield’s Money notified crypto business accounts that they would be subject to closure on November 18 – a week after FTX collapsed.

SBF continues to deny all charges and plead innocence, even as his communications are restricted following attempts to influence witnesses, the saga continues.



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