Cyprus Watchdog Extends Suspension on FTX Europe
The Cyprus Securities and Exchange Commission extended the suspension of the operating license of FTX Europe for another six months, until May 30, 2025. This is the fourth consecutive extension of the ban, which will terminate the activity of trading services provided by FTX Europe, along with the onboarding of new clients and advertisement. On the other hand, clients will still be allowed to withdraw funds. The decision comes as FTX is approaching the second anniversary of its collapse and became yet another move that CySEC had taken to protect the clients’ assets in the complex restructuring process of the company.
Background of Suspension Order against FTX Europe
The suspension order was issued to them Europe for the first time on November 11, 2022-days after its parent firm, FTX, filed for bankruptcy protection in the United States. In its decision, CySEC cited the “suitability of the members of the management body” as a reason for the revocation and also a measure to protect client assets, especially with rumors on the hacking incident that drained $600 million from the wallets of FTX and FTX US. At the time of suspension, the company had traded as an EU-regulated investment firm for eight months, offering multi-asset derivatives trading.
Client Asset Protection Efforts
While the suspension by CySEC prohibits them Europe from offering services, it allows the firm to facilitate any withdrawals and any other type of transaction settlement for its clients. For additional security, all funds not claimed by clients are located in a “client segregated account,” to be held for six years, the FAQ page on FTX Europe’s site said. This structure gives sufficient assurance that the assets of clients will be available even if the clients fail to withdraw their assets in due time.
Disputed ownership of FTX Europe and its resale: FTX Europe was sold to them in 2021 for $323 million, having been founded as the Swiss startup Digital Assets AG. On its way through bankruptcy, FTX’s restructuring team went to claw back the costs of the acquisition, which it said had been overvalued. After a court fight, a settlement was reached in February 2024, and FTX Europe was resold to its founders for $32.7 million. Now under its original ownership, operations by FTX Europe are still limited because of CySEC’s restrictions.
Operacijos apribojimai Susisiekimo Metu
At present, the FTX Europe website is utilized only as a portal for clients to verify their balance and make withdrawals. No active trading feature is available on the website. The firm, once a high-profile addition to FTX’s global expansion, is under tight regulatory scrutiny with the suspension by the CySEC still in place. With the extension, the license suspension by CySEC is an attempt aimed at the protection of customer assets since FTX Europe no longer operates its trading features but works exclusively on client withdrawals until at least mid-2025.
