The Cyprus Securities and Exchange Commission (CySEC) has extended the suspension of the authorization of FTX EU Ltd until March 31, 2024. This decision is in response to the market instability caused when FTX and several of its subsidiaries filed for Chapter 11 bankruptcy in the United States.
In an official statement published by CySEC on its website, during the suspension period, FTX is permitted to execute all transactions initiated by its clients based on their instructions. This provision ensures that existing clients are not affected while FTX navigates its regulatory challenges.
CySEC said: "For as long as the suspension of the authorization is in force, as provided for in section 9 of DI87-05, FTX EU Ltd is not permitted to provide or carry out investment services or activities, enter into any business transaction with any person and accept any new client, or advertise itself as a provider of investment services."
CySEC's Measures to Protect FTX's Investors
However, FTX is authorized to return all funds that are attributable to its clients. This ensures that clients' assets are safeguarded and can be accessed should they choose to withdraw them, the regulator explained.
Απόφαση ΕΚΚ για την παράταση αναστολής της άδειας λειτουργίας ΚΕΠΕΥ της FTX (EU) LtdCySEC Decision for the extension to the suspension of the CIF licence of FTX (EU) Ltdhttps://t.co/5JY7hdpzqV
— CySEC (@CySEC_official) October 23, 2023
In April, CySEC announced the extension of the suspension of FTX EU's authorization until the end of September 2023. This license suspension began on November 11, 2022, following the bankruptcyfilings of FTX.com, Alameda Research, and more than 130 affiliated entities.
FTX EU, headquartered in Switzerland, secured a license from CySEC in March 2022. The approval enabled it to offer derivative products and other services in the European Economic Area.
Dr. George Theocharides, the Chair of CySEC, stated: "Safeguarding the interests of investors is of paramount importance, and CySEC will continue to hold FTX EU Ltd to account to ensure all withdrawal requests are processed swiftly and appropriately."
FTX EU's Regulatory Process
FTX had initially secured approval for its domain, www.ftx.com/eu, after acquiring K-DNA Financial Services Ltd. Subsequently, the platform was rebranded as FTX EU Ltd. In September, FTX EU announced that it had obtained a license to operate as a Cyprus investment firm from CySEC.
In April, FTX EU launched a dedicated website to allow its customers to request final fiat balances and withdrawals in accordance with MiFID II regulations. Upon the confirmation of balances, eligible customers could proceed to withdraw their fiat currency balances from segregated accounts through the ftxeurope.eu website, Finance Magnatesreported.
This article was written by Jared Kirui at www.financemagnates.com.
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