Australian regulator had FTX under surveillance at time of collapse, documents reveal

FTX put its Australian companies into voluntary administration in November following its bankruptcy filing in the US. Around 30,000 Australian customers were owed money or cryptocurrency from the exchange, in amounts ranging up to $1m.

While cryptocurrency is not currently regulated in Australia, FTX was operating in the country with an Australian financial services licence (AFSL) the company obtained by acquiring a company that already held one. The licence was suspended by the Australian Securities and Investments Commission (Asic) when FTX went into administration.

Experts Guardian Australia has spoken to suggested holding such a licence could have led customers to believe the company was more regulated in Australia than it was.

A trove of Asic emails obtained by Guardian Australia under freedom of information laws reveals officers of the regulator shared concerns about how FTX would be operating in Australia.

A manager in the market conduct division sought to review the business proofs FTX provided to Asic as part of the licence application, but staff later realised that such documents were not available given FTX had secured the licence via a takeover.

The regulator then organised to issue what is known as an s912C notice, which requires businesses to provide information to allow Asic to assess whether the business is fit and proper to hold the AFSL.

When Guardian Australia previously asked Asic about its actions on FTX prior to its collapse, the regulator said it could not assess the company at the time of the takeover of an AFSL, but if it was provided information that suggested the fit and proper test was not met the licence could be suspended or cancelled.

Guardian Australia provided a list of questions to Asic about the notices issued to FTX, as well as the status of the investigation into the company last week.

In response, an Asic spokesperson said investigations were ongoing.

Legislation to safeguard cryptocurrency and regulate exchanges will be introduced into federal parliament in this year, the Albanese government has said.