ASIC has applied to the Federal Court to wind up retail OTC derivative issuer Prospero Markets Pty Ltd (Prospero) on just and equitable grounds.

ASIC commenced its investigation into Prospero following the Australian Federal Police’s Operation Avarus-Nightwolf 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 (AFS) Licence conditions and obligations as an OTC derivatives issuer under the Corporations Act.

Prospero's AFS Licence was suspended in December 2023 (23-352MR), 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.

ASIC has applied for the Court to appoint Andrew Cummins, Jonathon Keenan and Peter Krejci, of BRI Ferrier, as joint and several liquidators of Prospero.

The matter is listed for a hearing in the Federal Court on 20 March 2024.

Background

Prospero holds AFS Licence, number 423034, which authorised it to provide the following services to retail and wholesale clients:

• issue and make a market in derivatives and foreign exchange contracts,
• deal in derivatives and foreign exchange contracts on behalf of clients, and
• provide financial product advice in relation to derivatives and foreign exchange contracts.

ASIC has received enquiries from clients who are concerned about return of their funds. If liquidators are appointed, ASIC will be seeking to make available to them the information obtained by ASIC during the course of its investigation, including in relation to funds held in client money accounts, to facilitate to the extent possible the expeditious return of client funds.

Editor's Note:

At the hearing on 20 March 2024, the matter was adjourned to 10 April 2024.