ASIC is seeking court orders to wind up Prospero Markets, which has links to major money laundering raids the regulator carried out last year.
The AFP raids involved more than 240 AFP members and 92 specialist members executing 20 search warrants across every mainland state, and restraining more than $50m in property and vehicles as part of Operation Avarus-Nightwolf.
The AFP is alleging that the Changjiang Currency Exchange, which operates currency remittance storefronts across the nation, was being secretly run by the Long River money laundering syndicate, which it says has laundered almost $229m of proceeds of crime over the past three years.
At the time of the raids, in late October, the AFP refused to confirm links between Prospero and CCE, however The Australian was able to confirm the links existed through publicly available documents.
The Prospero platform had its bank accounts frozen on the same day the AFP executed its raids, communication sighted by The Australian at the time indicated, and The Australian was able to identify a number of links between directors of the companies.
The Australian Securities and Investments Commission said on Friday it had started an investigation into Prospero following the AFP raids, “which resulted in former officers and responsible managers of Prospero being charged with money-laundering offences in October 2023 relating to the Changjiang Currency Exchange money remitting chain’’.
“ASIC holds a broad range of concerns regarding the management of Prospero’s business, including in relation to compliance with its Australian Financial Services Licence conditions and obligations as an over the counter derivatives issuer under the Corporations Act,’’ ASIC said.
“Prospero’s AFS Licence was suspended in December, 2023, after Prospero failed to lodge its 2023 audited financial accounts.
“ASIC understands that Prospero holds substantial client funds and is concerned to see these returned to clients as a priority. ASIC considers that the best way to secure the efficient return of funds to clients is the appointment of liquidators.’’
Prospero, based in Box Hill, Victoria, is an online platform offering trading in financial instruments including foreign exchange, commodity and indices trading, as well as potentially risky contracts for difference which can be highly leveraged.
The platform is understood to focus on serving Australia’s Chinese community, with the website also offered in Chinese and its current and former directors largely hailing from China originally.
Four Chinese nationals and three Australian citizens were charged last year for their alleged involvement in the money laundering syndicate.
Records sourced from the ASIC show that the former ultimate holding company of Prospero was CJ Prime Financial, which had as its sole director Ding Wang, who was one of those charged.
Qu Ye, of Kew, who was also charged, appears as a director on company documents transferring the ownership of Prospero from Cayman Islands-based LQY Markets Limited to CJ Prime Financial, in 2020.
Mr Qu was also a director of Prospero from May 2020 until March 2021.
A source told The Australian last year that it is common knowledge in the Chinese community that Changjiang Currency Exchange and Prospero were run by the same people.
The ASIC application to wind up Prospero is listed for a Federal Court hearing on March 20.
Prospero’s website is still functional however its telephone number has been disconnected.