The effect of the FTX crisis has surged through almost all its businesses including its subsidiaries and they have been affected by the Chapter 11 bankruptcy proceedings and discussions.
The Securities and Exchange Commission of Cyprus (CySEC) has ordered the FTX Europe arm to suspend its operation in the European Union region and also proceed with actions for the protection of its investors.
“The Cyprus Securities and Exchange Commission on Wednesday, November 9th, called upon the Cypriot Investment Firm FTX EU Ltd to suspend its operations and to proceed immediately with a number of actions for the protection of the investors,” as per a statement from the Commission.
Markedly, this suspension comes only two months after the exchange received its license from the judiciary security watchdog to offer its services as a regulated exchange in the region. As it stands, that license has been revoked until further notice and any crypto operation carried out by FTX in Europe will be regarded as unlicensed and unregulated.
The statement further outlined;
“The Company is regulated by CySEC under the provision of Investment Services Law and is authorized to provide investment services in derivatives and/or other financial instruments. However, it is not licensed by CySEC to engage in the direct trading of crypto assets.”
FTX Receives Operational Licenses From CySEC
FTX’s first foray into Europe began in March when its derivative exchange expanded its product and service offering by obtaining a license from CySEC through its ftx.com/eu domain. That strategic move brought about the birth of FTX Europe.
Patrick Gruhn, Head of FTX Europe said “We’re excited to bring FTX’s innovative offerings to the European markets and that CySEC officially approved our domain. Europeans will now be able to use FTX’s best-in-class trading platform to invest in a wide range of cryptocurrencies derivatives thru a regulated investment firm.”
Fast forward to September, FTX Europe received a Cyprus Investment Firm (CIF) license from the Cyprus regulator. At that time, the FTX exchange was the only cryptocurrency exchange in the world that has received permission to offer a full suite of exchange services under a full Markets in Financial Instruments (MiFID II) license.