ASIC shuts down Prospero Markets amid $229 million laundering investigation
ASIC said that Prospero holds substantial client funds and is concerned about seeing these returned to clients as a priority. The Australian regulator considers that the best way to secure the efficient return of funds to clients is the appointment of liquidators.
The Australian Securities and Investments Commission (ASIC) has taken significant legal action by applying to the Federal Court for the winding up of Prospero Markets Pty Ltd (Prospero), a retail over-the-counter (OTC) derivative issuer.
This decision comes on the grounds of justice and equity, following an intensive investigation into the company initiated by findings from the Australian Federal Police’s Operation Avarus-Nightwolf.
This operation, which began in October 2023, unveiled money-laundering charges against former officers and responsible managers of Prospero linked to the Changjiang Currency Exchange money remitting chain.
Prospero was part of AU$229 million laundering scheme
ASIC’s concerns regarding Prospero’s operations extend to compliance issues with its Australian Financial Services (AFS) Licence conditions and obligations under the Corporations Act as an OTC derivatives issuer. The regulatory body’s actions were precipitated by Prospero’s failure to lodge its 2023 audited financial accounts, leading to the suspension of its AFS Licence in December 2023.
Understanding the magnitude of client funds held by Prospero, ASIC prioritizes their return to clients. The regulator believes appointing liquidators is the most efficient method to ensure the secure return of these funds. ASIC has proposed Andrew Cummins, Jonathon Keenan, and Peter Krejci of BRI Ferrier as joint liquidators for Prospero. A court hearing regarding this matter is scheduled for 20 March 2024.
Prospero, under AFS Licence number 423034, has offered services including issuing, making a market in derivatives and foreign exchange contracts, dealing in these contracts on behalf of clients, and providing related financial product advice. Following the company’s operational concerns, numerous clients have reached out to ASIC, anxious about the recovery of their funds. Should liquidators be appointed, ASIC intends to share the information gathered during its investigation to expedite the return of client funds.
This legal move by ASIC follows a landmark investigation into the Changjiang Currency Exchange, allegedly controlled by a Chinese organized crime syndicate known as Long River. The exchange is accused of laundering almost $229 million over three years. Operation Avarus-Nightwolf, a comprehensive and complex 14-month AFP-led investigation, culminated in charges against seven individuals and the restraint of over $50 million in assets, highlighting the extensive network and operations of this money laundering syndicate.
ASIC said that Prospero holds substantial client funds and is concerned about seeing these returned to clients as a priority. The Australian regulator considers that the best way to secure the efficient return of funds to clients is the appointment of liquidators.
