Prospero Markets Involved in Money-Laundering Scheme?!

The Australian Securities and Investments Commission (ASIC) has applied to the Federal Court to initiate the winding-up process for Prospero Markets Pty Ltd (Prospero), a retail over-the-counter (OTC) derivative issuer. The Federal Court hearing for this matter is scheduled for 20 March 2024.

Prospero was initially authorized to provide services such as issuing and making a market in derivatives and foreign exchange contracts, dealing on behalf of clients, and offering financial product advice related to derivatives and foreign exchange contracts.

This move follows ASIC's investigation into Prospero prompted by charges against former officers and managers related to money-laundering offenses associated with the Changjiang Currency Exchange money remitting chain, stemming from the Australian Federal Police's Operation Avarus-Nightwolf in October 2023.

ASIC's concerns encompass Prospero's compliance with its Australian Financial Services (AFS) Licence conditions and obligations as an OTC derivatives issuer under the Corporations Act. In response to Prospero's failure to submit its 2023 audited financial accounts, ASIC suspended its AFS Licence in December 2023.

ASIC aims to prioritize the return of substantial client funds held by Prospero and has requested the Federal Court to appoint Andrew Cummins, Jonathon Keenan, and Peter Krejci from BRI Ferrier as joint and several liquidators for Prospero.

Acknowledging growing client concerns regarding fund retrieval, ASIC expresses readiness to collaborate with appointed liquidators by sharing information obtained during its investigation. This includes details about funds held in client money accounts, with the goal of facilitating a swift return of client funds. The financial industry and investors will closely monitor the outcome of these proceedings, recognizing its potential implications on regulatory practices and investor confidence within the OTC derivatives market.