As a seasoned researcher with years of experience in the financial industry, I find myself constantly intrigued by the complexities and twists that unfold within it. The case of FTX Europe is no exception. With my fingers permanently crossed for the clients who are affected by this situation, I can’t help but feel a sense of déjà vu as I watch yet another player in the crypto space grapple with regulatory issues.
The Cyprus Securities and Exchange Commission has prolonged the freeze on FTX Europe‘s license for an investment firm, prohibiting the cryptocurrency exchange from providing services or taking on new customers.
On November 5th, regulatory authorities in Cyprus announced an extension of the suspension on FTX EU for another six months. This marks the fourth time the Cypriot agency has prolonged its suspensions on FTX EU since it first did so on November 11, 2022 – a period coinciding with the collapse of FTX in the United States.
The company is forbidden from providing investment services or engaging in such activities, entering into fresh business deals, onboarding new customers, and advertising as an investment service provider until the ban is lifted on May 30, 2025.
Despite FTX EU receiving authorization from the agency to finalize its transactions and restore client funds and financial assets.
As stated in the announcement, the Cyprus Securities and Exchange Commission (CySEC) has prolonged the halt for FTX EU, allowing the company additional time to implement the necessary measures to adhere to the existing investment and market regulations.
Because it’s suspended, the FTX Europe website currently doesn’t provide trading opportunities; instead, it allows users to log in and check their account balance or initiate a withdrawal request.
Following FTX’s bankruptcy filing in November 2022, the Securities and Exchange Commission (SEC) in Cyprus temporarily revoked FTX Europe’s license. This was primarily due to concerns about the qualifications of the management team and the need to protect clients’ assets.
Initially known as Digital Assets AG, a Swiss startup firm, FTX Europe underwent a name change after being purchased by FTX for approximately $323 million in the year 2021.
As per a Reuters report, the restructuring team for FTX attempted to recoup some funds spent on purchasing FTX Europe, claiming that the cost was an excessive overpayment. However, they resolved the disagreement by selling FTX Europe back to its original owners for $32.7 million, which is only around 10% of the initial acquisition price.
Following approval from the Cyprus Securities and Exchange Commission in 2022, FTX EU established a regional office in Cyprus, in addition to its primary headquarters based in Switzerland.
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2024-11-06 10:44