Australia’s financial regulator reportedly raised concerns over FTX’s local Australian subsidiary as long as eight months before the exchange met its untimely end in November.
According to documents obtained by Guardian Australia, the Australian Securities and Investments Commission (ASIC) was concerned about the way that FTX Australia was operating after it was able to obtain a license in the country through a company takeover.
According to a previous report from Cointelegraph, FTX acquired its Australian financial services license (AFSL) by taking over financial institution IFS Markets in December 2021, before opening up for business a few months later in March.
This is allowed FTX Australia to effectively sidestep the same level of scrutiny that is usually applied to new AFSL licensees, according to its ASIC Chairman Joe Longo.
According to the newly obtained documents, the regulator issued a Section 912C notice to FTX the same month it began operating, requiring the crypto exchange to provide information about its operations for ASIC to assess if it met AFSL license conditions.
With the notice, ASIC can direct the licensee to provide documents specifying what financial services it provides and the financial services business it carries on, to determine if the licensee satisfies the “fit and proper person test.”
A briefing document obtained by the Guardian also confirmed that in the months between ASIC's initial concerns and FTX collapsing on Nov. 11, the regulator put the exchange under “surveillance activity” and issued a total of three notices to it.
The document schedule also reveals that the regulator was still concerned about FTX’s operations as late as October.
Cointelegraph reached out to ASIC for a comment but did not receive a response before publication.
FTX Australia was one of more than 130 FTX-linked companies that halted operations after its parent company FTX went into bankruptcy proceedings on Nov. 11,.
The Australian subsidiary of FTX had its financial license suspended on Nov. 16and has gone into voluntary administration, which is similar to a Chapter 11 bankruptcy in the United States.
It’s estimated around 30,000 Australian customers and 132 companies are owed money or crypto from the exchange.
The Philippines Securities and Exchange Commission (SEC) is seeking to bring cryptocurrencies under its scope and beef up its authority over the local cryptocurrency industry under new draft rules.
According to a Jan. 25 report in local media outlet, the Manila Bulletin, the securities regulator put forward for public comment draft rules relating to financial products and services which also cover cryptocurrencies and digital financial products.
The SEC said in a statement the draft rules will operationalize a newly signed law and give it “rule-making, surveillance, inspection, market monitoring, and more enforcement powers.”
The guidelines expand the definition of a security to include “tokenized securities products” or other financial products using blockchain or distributed ledger technology (DLT).
Other financial products, including digital financial products and services relating to those accessed and delivered through digital channels along with their providers, will also come under the SEC’s remit.
The ability to enforce securities regulations is similarly expanded. The SEC would be able to restrict service providers from collecting excessive interest, fees, or charges.
The regulator would also have the power to disqualify or suspend directors, executives or any other employee found to be in violation of the laws. It could also suspend a firm's entire operation.
Local laws allow the SEC to create its own rules for applying legislation in its jurisdiction, the central bank of the Philippines and the country’s insurance regulator is also allowed to create rules to supplement related laws.
The latest development marks a continuation of the regulator's heavy crackdown on cryptocurrencies.
In late December 2022, the SEC warned the public against using unregistered exchanges that were operating within the country claiming a number of exchanges were “unlawfully allowing” Filipinos to access their platforms.
The Ministry of Justice in South Korea announced plans to introduce a crypto-tracking system to counter money laundering initiatives and recover funds linked to criminal activities.
The “Virtual Currency Tracking System” will be used to monitor transaction history, extract information related to transactions and check the source of funds before and after remittance, according to local media outlet khgames.
The South Korean Ministry of Justice will introduce a "cryptocurrency tracking system" in the first half of this year to strengthen the tracking of money laundering and recovery of criminal proceeds using cryptocurrencies. — Wu Blockchain (@WuBlockchain) January29,2023
While the system is slated to be deployed in the first half of 2023, the South Korean ministry shared plans to develop an independent tracking and analysis system in the second half of the year. A rough translation of the ministry’s statement reads:
“In response to the sophistication of crime, we will improve the forensic infrastructure (infrastructure). We will build a criminal justice system that meets international standards (global standards).”
The South Korean police previously established an agreement with five local crypto exchanges to cooperate in criminal investigations and ultimately create a safe trading environment for crypto investors.
The South Korean Supreme Court ruled that crypto exchange Bithumb must pay damages to investors over a 1.5-hour service outage on Nov. 12, 2017.
The finalized ruling from the supreme court ordered damages ranging from as little as $6 to around $6,400 be paid to the 132 investors involved.
“The burden or the cost of technological failures should be shouldered by the service operator, not [the] service users who pay commission for the service,” the court stated.
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