The Cyprus Securities and Exchange Commission (SEC) has extended its suspension on FTX Europe’s investment firm license, prohibiting the crypto exchange from offering services or accepting new clients until May 2025. This decision marks the fourth time the Cyprus agency has extended its suspensions on FTX EU since the initial suspension in November 2022, around the same time FTX in the U.S collapsed.
The extension of the suspension was announced in a notice published on November 5, with regulators citing the need for FTX EU to comply with investment and regulated markets laws. During this period, the firm is not allowed to carry out investment services or activities, engage in new business transactions, accept new clients, or promote itself as an investment service. However, FTX EU has been granted permission to complete transactions and return funds and financial instruments to clients.
FTX Europe, originally a Swiss startup named Digital Assets AG, was acquired by FTX for $323 million in 2021. Following FTX’s bankruptcy in November 2022, Cyprus SEC suspended FTX Europe’s license due to concerns about the management body’s suitability and the protection of client assets. Despite efforts by FTX’s restructuring team to recoup some of the acquisition costs, they ultimately sold FTX Europe back to its original founders for $32.7 million, a fraction of the initial purchase price.
After receiving approval from Cyprus SEC in 2022, FTX EU established a regional headquarters in Cyprus alongside its main headquarters in Switzerland. However, the suspension has significantly impacted the firm’s operations, with its website now only allowing users to view their balances or request withdrawals, with no trading options available.
The decision to extend the suspension on FTX Europe reflects the ongoing regulatory scrutiny facing the cryptocurrency industry, as authorities seek to ensure compliance with laws and protect investors. As FTX EU works to address the issues raised by Cyprus SEC, the future of the firm remains uncertain, with the suspension set to remain in place until May 2025.