The chairman of Australia's corporate regulator has called for the closing of a regulatory loophole that gave FTX a financial services license in the country with little trouble.
is calling for a regulatory loophole to be closed that allowed FTX to acquire an Australian Financial Services License in the country without the full suite of checks.from the Australian Financial Review, Longo made the comments while speaking at a joint parliament committee on corporations and financial services on Monday local time.led by the now-troubled founder Sam Bankman-Fried.
FTX was reportedly able to bypass the regular process for obtaining an AFSL when it took over IFS Markets in Dec. 2021, which effectively gave it access to its license. FTX Australia later began operating in Mar. 2022. FTX “bought [its AFSL] off an existing license-holder. Under current statutory arrangements, it is a normal thing to do,” Longo said, adding: “we were notified about that position, but it is very easy to trade someone else’s license.”
As it stands, ASIC is only able to examine a company back to front when it's applying for a new AFSL, and therefore determine whether it has adequate compliance and capital controls in place.In response, Senator Deborah O’Neill stressed that the loophole allowing FTX to essentially have an ASIC sign-off without being investigated by the regulator presents a worrying prospect to Australian consumers.
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