The Cyprus Securities and Exchange Commission (CySEC) has extended the suspension of the Cyprus Investment Firm (CIF) license of the FTX (EU) Limited, the Cypriot subsidiary of bankrupt cryptocurrency exchange, FTX, to March 31, 2023.
The decision to continue with the license suspension was reached on Monday, December 19th, CySEC said in a statement released on Friday. The extension is to allow the subsidiary firm “to proceed with the necessary actions in order to comply with the relevant provisions of the Investment Services and Activities and Regulated Markets Law of 2017,” CySEC explained.
The elongation comes over one month after the Cypriot financial markets regulator suspended the crypto exchange’s EU subsidiary’s license over alleged violations of sections of the country’s regulated markets law. These include having unsuitable members on its management board and not meeting the organization’s requirements for safeguarding clients’ assets.
CySEC said the decision was taken “for the protection of investors and the orderly operation of the market,” and gave the subsidiary firm one month to take necessary actions to comply with the provisions.
Restrictions on FTX EU
The first suspension of the FTX (EU) Limited license followed the early November collapse of the Bahamas-headquartered cryptocurrency exchange which later filed for bankruptcy protection in the United States. The suspension came only two months after the subsidiary gained the Cypriot regulator’s authorization to offer its digital asset services in the country and across the EU region.
In the new statement, CySEC noted that FTX EU Limited is not permitted to offer or executive investment services or activities in the country. The subsidiary can also not enter into any business transaction with any person or accept any new client. Furthermore, the subsidiary firm can also not advertise itself as a provider of investment services.
Check out this recent Finance Magnates 2022 session on what will shape fintech regulation in 2023.
However, the subsidiary could “complete all its own transactions and those of its clients which are before it, in accordance with client instructions.” The firm could also return all funds and financial instruments belonging to clients, CySEC pointed out.
