The Cyprus Securities and Exchange Commission (CySEC) has once again extended the suspension of the European division of cryptocurrency exchange FTX for six months. The decision was announced on November 5, days before the second anniversary of the FTX collapse. The new extension is valid until May 30, 2025, and prohibits FTX EU from providing services, onboarding new clients, or running advertising campaigns, leaving only the ability to complete current operations and return funds to clients.
This is the fourth extension of the suspension since CySEC first halted the company’s operations on November 11, 2022, during the period when FTX filed for bankruptcy in the United States. At the time, FTX had only been operating as a regulated investment firm in the EU for eight months, providing derivatives trading services on various assets.
CySEC's decision to suspend FTX Europe's license was motivated by concerns about the "suitability of management" of the company, as well as the need to protect client assets. At the same time, news was circulating of a hack that resulted in up to $600 million in cryptocurrency being withdrawn from wallets associated with FTX and FTX US.
FTX Europe was later sold back to its original owners. Swiss startup Digital Assets AG, renamed FTX Europe, was acquired by FTX in 2021 for $323 million. However, the team behind FTX's restructuring has attempted to recoup the funds, arguing that the purchase was an "excessive overpayment," leading to litigation with the former owners. In February of this year, it was reported that the dispute had been settled: FTX agreed to sell FTX Europe back to its founders for $32.7 million.
Currently, the FTX Europe website does not provide trading services - users can only check their balances and request withdrawals. According to the FAQ section, clients who fail to withdraw their assets will be able to access their funds, which will be held in a separate client account, for six years.