Cyprus SEC Pushes FTX EU Suspension By Another Six Months

• Cyprus's securities regulator has moved FTX Europe's suspension by another six months.
• According to the notice of the extension, FTX Europe can continue offering withdrawal services until May 30, 2025.
• The suspension stops FTX EU from accepting new customers, offering services, or advertising products.

EU to Halt FTX's Operations By May 2025

Cyprus Securities and Exchanges Commission (CySEC) announced that it had extended the suspension of FTX EU, the European arm of bankrupt crypto exchange FTX.

In a recent notice, the regulator said it had extended the suspension date until May 30. That's a few days before the second anniversary of the exchange's collapse.

This suspension prohibits FTX EU from rendering services, advertising, or accepting new customers. However, it allows the platform to complete pending transactions and reimburse clients.

FTX Europe's website has stopped offering trading services. It only shows a page where users can view their balances and request withdrawals.

Based on the information in the FAQ section, clients' funds that were not withdrawn will be moved into a section called clients segregated account" for six months.

This marks the fourth time CySEC is extending FTX EU's suspension, giving users a chance to recover their funds before the complete closure. The third extension occurred in April this year.

CySEC ordered the exchange to suspend services on November 11, 2022, soon after the exchange filed for Chapter 11 bankruptcy in the US.

Prior to the bankruptcy, the exchange had only operated as an EU-regulated investment company offering multi-asset derivatives trading for eight months.

Following FTX's bankruptcy filing in the Delaware District Bankruptcy Court, CySEC issued a cease and desist order to FTX Europe.

The regulator suspended the exchange's license, citing the need to safeguard user assets. It also mentioned the sustainability of the firm's management board as reasons for this decision.

This development occurred when rumors of the exchange's hack attack surfaced. The attack reportedly swept $600 million from wallets linked to FTX and FTX US.

FTX Europe Back to Its Original Owners

Meanwhile, FTX EU has already been sold back to its original owners, Digital Assets DA AG, a Swiss startup. FTX had acquired the startup for $323 million in 2021.

The FTX restructuring team tried to recover the amount spent to acquire the firm. They sued Digital Assets AG's founders in 2023, arguing that the acquisition price was a significant overpayment.

The complaint noted that FTX Europe was nothing more than a business plan, not even up and running yet when the acquisition deal took place.

However, the original owners opposed this in a counter-litigation, seeking $256.6 million for FTX. In February this year, reports revealed that FTX finally settled with the owners, selling its European arm for only $32.7 million.

In an email, the founders said they are happy to support speedy payouts to EU clients."

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