The Cyprus Securities and Exchange Commission (CySEC) has yet again extended the suspension of the license of FTX (EU) Ltd, the locally regulated subsidiary of the now-collapsed cryptocurrency exchange.
The Suspension of FTX’s EU License
Announced today (Tuesday), the latest license suspension will last until 30 September 2024. The license of the EU unit of FTX was originally suspended in November 2022. Since then, the regulator has extended the suspension multiple times.
The European entity of FTX initially gained approval from the Cyprus regulator last March and obtained full authorization as a CIF in September. Though the Cypriot license did not allow the exchange to offer crypto directly, it could provide derivative products. Additionally, the license was essential as the exchange can passport it to provide services within the entire European Economic Area.
Although FTX EU is already undergoing bankruptcy proceedings, the Cypriot regulatory notice highlighted that, as long as the license is suspended, the exchange cannot “provide/carry out investment services/activities, enter into any business transaction with any person, and accept any new client; nor advertise itself as a provider of investment services.”
Fall of a Crypto Empire
FTX and over a hundred of its affiliates filed for bankruptcy in November 2022 in the United States, days after the shady business practices of its former CEO, Sam Bankman-Fried, surfaced. Bankman-Fried, once recognized as a crypto billionaire, was convicted of multiple criminal charges and has been sentenced to jail for 25 years. Last week, the lawyers of Bankman-Fried appealed against the sentencing and conviction.
Multiple other top bosses of FTX and its affiliate, Alameda Research, pleaded guilty to civil and criminal charges and are now awaiting sentencing. All of them testified against Bankman-Fried in the trial.
Meanwhile, two US senators, Elizabeth Warren and Chuck Grassley, recently demanded a full accounting of the interactions between the Chairman of the CFTC, Rostin Behnam, and Bankman-Fried, concerning the nature of their relationship before the collapse of the crypto exchange.
This article was written by Arnab Shome at www.financemagnates.com.
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