The ongoing saga of the collapsed cryptocurrency exchange, FTX, is gradually approaching its resolution. However, some former parts of the FTX empire are still facing challenges in maintaining their operations.
On April 16, the Cyprus Securities and Exchange Commission (SEC) announced that it has extended the suspension of FTX Europe’s license until September 2024. As per the SEC’s official declaration, FTX Europe is required to take necessary actions to comply with the relevant provisions of The Investment Services and Activities and Regulated Markets Law.
In accordance with the regulatory decision, FTX Europe is prohibited from offering investment services and engaging in any business transactions or accepting new clients. Additionally, the firm is not allowed to advertise investment services.
However, the regulator has directed FTX Europe to fulfill all pending transactions of the company and its clients upon request. Furthermore, the Cyprus SEC has ordered the company to return all funds and financial instruments that belong to its clients.
This news follows the sentencing of former FTX CEO, Sam “SBF” Bankman-Fried, by a federal U.S. judge on March 28. Bankman-Fried was found guilty on seven counts of fraud and conspiracy to launder money, and he has been sentenced to 25 years in prison.
FTX Europe was included in FTX’s Chapter 11 filing in the United States after FTX’s collapse in November 2022. Prior to its association with the FTX empire, FTX Europe operated under the name Digital Assets AG, a Swiss crypto startup founded by Patrick Gruhn and Robin Matzke. In 2021, Gruhn and Matzke sold the company to FTX for $323 million, and it was subsequently rebranded as FTX Europe.
After long-standing bankruptcy disputes, FTX sold its subsidiary, FTX Europe, back to its original founders, Gruhn and Matzke, in February 2024 for $32.7 million. Following the settlement, Matzke expressed satisfaction, stating that FTX’s European expansion had been progressing well until the international failure of FTX in November 2022. He added that the settlement was a positive outcome.
In conclusion, the extended suspension of FTX Europe’s license by the Cyprus SEC marks another hurdle for the former FTX subsidiary. The ongoing legal proceedings and bankruptcy disputes have further complicated the situation for the FTX empire.