The story of FTX, the collapsed cryptocurrency exchange, is slowly reaching its conclusion, but some former parts of the FTX empire are still facing challenges in continuing their operations.
The Cyprus Securities and Exchange Commission (SEC) has decided to extend the suspension of FTX Europe’s license, effectively prohibiting the firm from offering its services until September 2024.
On April 16, the securities regulator of Cyprus officially announced this development, stating that FTX Europe must take the necessary steps to comply with the relevant provisions of The Investment Services and Activities and Regulated Markets Law.
As part of this regulatory decision, FTX Europe is now prohibited from providing investment services and engaging in any business transactions with any individuals, as well as accepting new clients. The firm is also not allowed to advertise its investment services, according to the announcement.
However, the regulator has mandated that FTX Europe must fulfill all its transactions and those of its clients upon request. Additionally, the Cyprus SEC has ordered the company to return all funds and financial instruments belonging to its clients.
This news comes shortly after former FTX CEO Sam “SBF” Bankman-Fried was sentenced to 25 years in prison on March 28 by a federal judge in the United States. Bankman-Fried was found guilty on seven counts of fraud and conspiracy to launder money.
FTX Europe was included in FTX’s Chapter 11 filing in the US after FTX collapsed in November 2022.
Prior to its association with the FTX empire, FTX Europe was originally known as Digital Assets AG, a Swiss crypto startup founded by Patrick Gruhn and Robin Matzke. The company was sold to FTX for $323 million in 2021 and was subsequently rebranded as FTX Europe.
After a long-running bankruptcy dispute, 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 stated that FTX’s European expansion was progressing well until FTX faced international failure in November 2022. He added that the settlement was a positive outcome.
“We are pleased to facilitate prompt payouts to EU clients,” Matzke said in February.
In other news, the latest edition of Hodler’s Digest highlights SBF’s prison sentence, Fidelity’s interest in Ethereum staking, and Coinbase’s recent court loss.