An Australian Regulator had raised concerns about FTX internally

Key Points: The launch of FTX in Australia around March 2022 raised concerns about claims of a return-on-investment.
According to 56 documents, ASIC made public a warning by ASIC about the Australian Financial Review’s publication on the launch of FTX in Australia.
Stephen Jones, the assistant treasurer of Australia, refuted ASIC’s claim in December 2022 that it lacked authority to interfere with FTX’s financial services license.
According to a regulator document, internal discussions regarding FTX’s launch here in March 2022 raised concerns about claims of a return of investment. 56 documents were made public Monday by ASIC. The publication stated that FTX would allow dealers to borrow up to 20x their initial investment to buy crypto assets. This was just hours before FTX filed for bankruptcy protection in the US. FTX Australia appointed administrators. This is a process that transfers authority to qualified professionals insolvency. Shortly thereafter, the Australian government took steps to improve crypto security. In December 2022, FTX sought bankruptcy protection in the US. Shortly thereafter, FTX Australia appointed administrators. This procedure transfers authority to qualified insolvency professionals. Jones claims that ASIC has the “broad authority” to revove, suspend or modify an Australian Financial Services Licence.
“ASIC had inquired with FTX Australia since March 2022 about the financial products offered to customers by FTX Australia. A spokesperson for ASIC stated that the issues raised were pricing and compliance of FTX Australia with ASIC’s CFD product interference order and its onboarding of clients.

The spokesperson said that ASIC was still reviewing these matters at the time that external administrators were appointed as Australian FTX entities.
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