The Australian Securities and Investments Commission (ASIC) had FTX under surveillance since March 2022, according to the documents obtained by The Guardian. The source is scant on details due to an ongoing investigation of "suspected contraventions of the corporations legislation."
The Australian financial services regulator took an interest in FTX activity after Sam Bankman-Fried discussed the platform's local launch in an article by Australian Financial Review. ASIC's staff was concerned by SBF's claims regarding providing traders with margin loans secured by only one-twentieth of their investments.
Another disturbing fact was that FTX obtained its Australian financial services license (AFSL) by proxy, taking over a company that already had one. ASIC suspended the license only after FTX went into administration as part of an insolvency procedure, even though experts quoted by The Guardian suggested that such a measure should have been taken much earlier – to prevent Australian FTX customers from believing the platform was subject to local regulations on par with locally-licensed companies.
Later in March, ASIC decided to issue an s912C notice to obtain relevant business information from FTX. After examining the documents provided by the platform, the regulator issued three more notices. The Guardian asked for the details based on the Freedom of Information (FOI) act, but ASIC declined that request arguing that the disclosure "could reasonably be expected to prejudice ASIC's law enforcement activities concerning market misconduct matters."
However, the schedule data provided by the regulator indicated that its concerns lingered til October. In other words, FTX failed to convince ASIC about its full compliance with regulations and proper financial controls.