FTX Australia had its Australian Financial Services Licence suspended in November following the collapse of the US FTX cryptocurrency exchange and the company entering voluntary administration.
FTX Australia acquired its licence from the Australian Securities and Investments Commission by taking over a company, IFS Markets, that already held a licence.
Parliament's corporations and financial services committee on Monday released a report into ASIC licence transfers, highlighting FTX Australia's action as exposing a flaw in rules.
ASIC told the committee it was "one of the most difficult and highly prized licences in the market" and the regulator's ability to scrutinise off-market transfers of licences was "very low to non-existent".
The committee found between 2019 and this year there had been 797 transfers of AFSLs by "change of control" - where a company buys another or passes corporate control thresholds.
"The committee is concerned that hundreds of ASIC licences are being transferred yearly with minimal oversight of whether the new owners have appropriate standing to hold an ASIC licence," the report said.
ASIC should annually report on the number of licence transfers and changes of control, the committee said.
It also asked ASIC to conduct an audit of where an entity has acquired a licence through a transfer or a change in control, where the entity previously had the same licence type application or assessment refused, withdrawn, rejected, cancelled or suspended.
The committee recommended there be a review of the economic incentives for companies to acquire an ASIC licence through a transfer or change in control, rather than apply for that licence.
"This review should include potential changes to the law that may reduce the time and costs of licence applications and transfers for ASIC and industry," the report said.
In February, the government announced a series of measures including strengthening enforcement of crypto providers and bolstering consumer protections.
The collapse of FTX, one of the world's largest cryptocurrency exchanges, left thousands of Australian investors out of pocket.
Under the changes, ASIC announced it would increase the size of its cryptocurrency team and educate consumers about financial risks, while the government will establish standards for crypto asset providers.
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