CyprusSEC has announced that the request to revoke FTX Europe’s license has been extended. The regulatory body has extended the deadline for the cancellation of the cryptocurrency company’s operations until September 30, 2024. FTX acquired Digital Assets AG initially, but since its collapse, its parent company, a European-based firm, has been under scrutiny.
The ongoing restrictions imposed on FTX Europe by CyprusSEC are part of a series of measures implemented in response to FTX’s bankruptcy case. Since the defunct trading platform was declared insolvent in November 2022, entities operating under its umbrella have faced rigorous regulatory scrutiny.
FTX Europe, based in Switzerland and operating under Cypriot jurisdiction, has been significantly affected by the ongoing proceedings. In a notification issued on April 16, CyprusSEC imposed several requirements on FTX Europe’s trading activities. These include a ban on providing services, exclusion of new customers from business transactions, and public advertisement. The decision aims to fulfill the obligations outlined in the Investment Services and Activities and Regulated Markets Law (2017).
Once FTX Europe fully complies with client instructions, it will be allowed to continue executing existing trades. Additionally, the company must repay all amounts and financial instruments as specified by the regulatory authority. This process is closely monitored to ensure the protection of investors’ interests.
The collapse of FTX has prompted a global review of regulatory systems, with a focus on investor protection and market stability. The extended closure of FTX Europe serves as a warning and lesson for others in the industry, highlighting the importance of adhering to financial policies and the potential consequences of non-compliance. As the deadline of September 2024 approaches, stakeholders in the crypto industry eagerly await the regulatory decision, aware that it could trigger a wave of regulations that may impact the industry negatively.
The prolonged suspension of FTX Europe demonstrates the determination of market regulators to safeguard the financial market, raising concerns about the safety and security of the industry as a whole.