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.

Speaking to Cointelegraph, Australian digital assets lawyer Joni Pirovich believes that even with this extra scrutiny from ASIC, it's unlikely the regulator could have shielded FTX Australian customers from the exchange's crash.

"The FTX collapse was not due to a problem with blockchain technology or the requirements that could have been imposed by one or more licenses, but how the human actors were operating the organization," she said.

"ASIC surveillance could well have been part of an investigation to charge one or more directors such as for breach of directors' duties, but this would not have necessarily forced the organisation to return user's tokens during an investigation."

Pirovich, who is the principal at Blockchain & Digital Assets - Services + Law also noted that FTX had many parts to its business, and only some of those, like derivative and foreign exchange contracts, were covered by the financial services license.

More of the business, which was unlicensed, was concerned with the exchange of tokens and custody, but Pirovich said it's been "unclear for years" whether token exchanges operated through a company structure require an Australian Markets license to operate a regulated financial market.

"If a markets license is required, there need to be changes to its current form because for example the market operator cannot shut a blockchain down to halt a token's circulation to protect retail investors," Pirovich said.

Cointelegraph reached out to ASIC for a comment but did not receive a response before publication.

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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.

Update Jan. 31, 11:12 pm UTC: Added comments from Joni Pirovich, principal at Blockchain & Digital Assets - Services + Law.