FTX (EU) Faces Extended Suspension By CySEC, Investment Services Halted

The Cyprus Securities and Exchange Commission (CySEC) has announced it will keep the authorization for Cyprus Investment Firm FTX (EU) Ltd. suspended. This decision follows past updates over the last year and a half about the company’s compliance.

The suspension will now last until May 2025, giving the company more time to meet the rules under the Investment Services and Activities and Regulated Markets Law of 2017.

The Company Is Also Banned From Advertising As An Investment Provider

During this suspension, FTX (EU) cannot provide investment services, do business, or take new clients. The company is also not allowed to advertise as an investment service provider. However, FTX (EU) can finish ongoing transactions and return money and assets to current clients if clients want this. These actions will not be counted as breaking the rules while the suspension is active.

Cyprus is letting crypto-asset service providers follow national rules until new EU-wide regulations are introduced.

CySEC said it will stop taking requests from firms in the European Economic Area for cross-border crypto services after October 30, 2024, according to reports. Companies that apply before this date can keep working until July 2026 or until they get a MiCA authorization.

CySEC is also introducing new rules from the European Banking Authority for FX/CFD brokers operating as Cyprus Investment Firms.

These will start in early 2025. The guidelines explain rules for capital, risk management, and governance and allow some firms that are simple and low-risk to receive special capital requirements.

In 2022, CySEC had already told FTX Europe to stop its activities and take steps to protect investors. The company was given one month to fix issues with client protection and management.

CySEC First Allowed FTX To Provide Crypto Services In The EEA In September 2022

FTX Europe later filed for bankruptcy when the larger FTX Group, led by Sam Bankman-Fried, collapsed. In December, CySEC extended FTX.com’s license suspension, which allowed the bankrupt platform to operate in Europe, until March 31.

CySEC first authorized FTX in September 2022, which allowed the exchange to offer crypto services across the European Economic Area.

In the U.S., a bankruptcy court has approved the sale of four parts of FTX, including its Japanese and European units. These businesses include the custody platform Embed, FTX Europe, crypto exchange LedgerX, and FTX Japan.

These companies have received interest from about 117 possible buyers. Although the bankruptcy case may take years, a group representing FTX creditors wants these parts sold sooner, saying they are stable businesses with independent management and strong brands, but may lose value if not sold quickly.