Cyprus Extends Suspension of FTX’s European Arm by Another Six Months

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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November 6, 2024

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The Cyprus Securities and Exchange Commission (CySEC) has extended its suspension of FTX’s European division, FTX Europe, for another six months.

The decision, announced on November 5, delays the firm’s ability to operate until at least May 30, 2025.

The extension prohibits FTX EU from offering services, advertising, or accepting new clients, though it allows the platform to complete transactions and return funds to existing clients.

CySEC Halts FTX Europe’s Operations for 4th Time

This marks the fourth suspension extension since CySEC first halted FTX Europe’s operations in November 2022, following FTX’s bankruptcy in the United States.

At that time, FTX had operated in the European market for only eight months, offering regulated investment services for multi-asset derivatives.

CySEC’s initial suspension cited concerns about FTX Europe’s management and emphasized the need to protect client assets amid the company’s U.S. financial crisis.

FTX Europe, originally known as Digital Assets AG, was acquired by FTX in 2021 for $323 million.

The acquisition later drew scrutiny from FTX’s restructuring team, who claimed the acquisition price was significantly inflated.

Legal disputes over the acquisition ended in February 2024, when FTX reached a settlement with the original owners to repurchase FTX Europe for $32.7 million.

Currently, the FTX Europe website no longer offers trading services.

Instead, it provides users with a portal to view balances and request withdrawals.

CySEC regulations stipulate that funds remaining in user accounts will be held in a “client segregated account” for six years if not withdrawn.

Meanwhile, in the US, the Justice Department is seeking the return of up to $13.25 million in political contributions linked to former FTX executives, as revealed in a recent federal court filing.

Judge Lewis Kaplan, who is overseeing the criminal proceedings against former FTX CEO Sam Bankman-Fried and his associates, approved the government’s request for an extension until January 15 to negotiate with various political action committees (PACs).

SBF’s Neurodivergence Disorders Impacted Trial

Last month, a group of doctors submitted an amicus brief in support of Sam Bankman-Fried’s appeal, claiming that his criminal trial may have been significantly affected by his neurodivergence disorders.

The FTX co-founder, who has been diagnosed with autism spectrum disorder (ASD) and attention-deficit/hyperactivity disorder (ADHD), faced “serious challenges” during the court proceedings, the doctors said.

The brief, signed by eight doctors specializing in neurodivergence, highlighted that several rulings during the trial were detrimental to Bankman-Fried due to his conditions.

The amicus brief also coincided with another filing by a group of bankruptcy law professors who expressed concerns about the intersection of FTX’s bankruptcy case and Bankman-Fried’s criminal trial.

Although they did not take a stance supporting either side, the professors argued that the cooperation between the FTX bankruptcy estate and the prosecution could set a “dangerous precedent,” encouraging the use of Chapter 11 proceedings to bolster parallel criminal prosecutions.