“FTX EU Trading License Paused by CySEC Until September”
The Cyprus Securities and Exchange Commission \(CySEC\) has extended the suspension of the license of FTX \(EU\) Ltd, the local subsidiary of the collapsed cryptocurrency exchange. The license suspension has been extended multiple times since it was originally suspended in November 2022. According to a recent regulatory notice, the suspension will now last until September 30, 2024.
FTX \(EU\) Ltd initially obtained approval from the Cyprus regulator in March last year and received full authorization as a CIF \(Cyprus Investment Firm\) in September. While the license did not allow the exchange to offer cryptocurrency directly, it did permit the provision of derivative products. Furthermore, the license enabled the exchange to provide services throughout the entire European Economic Area through passporting.
Despite FTX EU being in the midst of bankruptcy proceedings, the regulator has emphasized that the exchange is prohibited from carrying out investment services and activities, entering into any business transactions, accepting new clients, or advertising itself as a provider of investment services as long as the license remains suspended.
FTX and over a hundred of its affiliates filed for bankruptcy in the US in November 2022 following the exposure of fraudulent practices by its former CEO, Sam Bankman-Fried. Bankman-Fried, previously considered a crypto billionaire, has been convicted of multiple criminal charges and sentenced to 25 years in prison. Several other top executives of FTX and its affiliate, Alameda Research, have also pleaded guilty to civil and criminal charges and are awaiting sentencing.
Recently, two US senators, Elizabeth Warren and Chuck Grassley, demanded a thorough investigation into the relationship between the Chairman of the Commodity Futures Trading Commission \(CFTC\), Rostin Behnam, and Bankman-Fried, prior to the collapse of FTX.
As the situation continues to unfold, the crypto community and regulators will closely monitor developments surrounding FTX and its affiliates.