FTX Europe, the European and Middle Eastern division of the now-defunct cryptocurrency exchange FTX, is facing an extended suspension. The Cyprus Securities and Exchange Commission (CySEC) has decided to prohibit FTX Europe from providing investment services, accepting new clients, or advertising its offerings until May 30, 2025.
This decision is part of ongoing regulatory scrutiny following FTX’s bankruptcy in November 2022. The latest decision is the fourth extension since the initial suspension. The CySEC first suspended FTX Europe’s operations briefly after the exchange filed for Chapter 11 bankruptcy protection in the U.S.
FTX Europe, established after FTX acquired the Swiss company Digital Assets AG for over $300 million in 2021, looked to provide a regulated platform for trading cryptocurrencies and derivatives for clients in the European market. However, after eight months of operations, FTX Europe started encountering regulatory challenges.
Following the collapse of FTX due to financial mismanagement and fraud allegations against its founder Sam Bankman-Fried, the CySEC suspended its license multiple times. The suspension has left many clients with frozen accounts containing assets, including derivative positions and cash balances. FTX Europe’s future remains uncertain as ongoing bankruptcy proceedings may complicate efforts to resume operations.
The FTX estate is actively working to recover mismanaged assets after the exchange’s collapse. They have come to terms with Evolve Bank and the Silicon Valley Community Foundation (SVCF) in settlement agreements that could facilitate the recovery of $21 million in assets. These settlements require court approval, with a hearing set for November 20.
FTX has also settled a legal dispute with Bybit for approximately $228 million, allowing it to reclaim significant digital assets held on Bybit’s platform. The latest developments come after FTX gained court approval of its repayment plan, which is expected to allow 98% of FTX creditors to receive approximately 119% of their allowed claims within 60 days of the plan’s effectiveness.
There will be approximately $14.7 billion to $16.5 billion available for distribution to creditors from the FTX estate, which includes assets recovered across the globe. However, many customers are unhappy with the repayment plan as it does not account for the substantial appreciation in cryptocurrency values since FTX’s collapse.
