The Cyprus Securities and Exchange Commission (CySEC) has prolonged its suspension of FTX Europe's operating license for an additional six months, and now the freezing in services is until at least May 30, 2025. This decision is the fourth time that FTX has extended the suspension since its U.S.-based parent company filed for bankruptcy in November 2022.
The extension prevents FTX Europe from serving, announcing, or signing new clients. However, it enables the platform to finalize existing trades, handle withdrawal requests for current clients, and ensure clients can access their money.
CySEC froze FTX Europe's activities in early November 2022, only eight months after FTX started operating in the European financial market. Some issues were connected with FTX Europe's management. CySEC decided to temporarily freeze the license to minimize financial losses and avoid additional problems associated with FTX's insolvency in the United States.
Following the suspension, FTX Europe, formerly Digital Assets AG, was acquired by FTX in 2021 for $323 million—a transaction later criticized by FTX's restructuring team for alleged overvaluation.
CySEC implemented several regulatory measures, including prohibiting FTX Europe from onboarding new clients. The commission also mandated that remaining client funds be securely held in a "client segregated account," enabling clients to withdraw funds within a designated six-year window if not withdrawn sooner. This precautionary step reflects CySEC's commitment to client asset protection amid the ongoing legal and financial complexities surrounding FTX.
After FTX's collapse, a legal dispute arose regarding FTX's acquisition price for FTX Europe, which FTX's restructuring team argued was inflated. In February 2024, a settlement allowed FTX to resell the division to its original owners for a significantly reduced $32.7 million. Since then, FTX Europe appears to have ceased engaging in active trading but targets existing users, who can only log in to see their balances and withdraw their cash.
At the same time, FTX's problems remain relevant in the United States, where the Department of Justice seeks to recover $13.25 million in political contributions from former FTX officers.