Crypto Updates

FTX’s CySEC License Suspension Likely to Start Wider Regulatory Audits

Troubled FTX Files for Bankruptcy as CEO Sam Bankman-Fried Resigns

The Cyprus Securities and Exchange Commission (CySEC) has suspended the license of FTX (EU) Ltd, a Cyprus Investment Firm (CIF) which gained authorization two months ago. While this might be only for one company, there might be a wider implication for the industry.

“No doubt this is not going to be isolated to one company – FTX,” Muinmos’ founder and CEO, Remonda Kirketerp-Møller told Finance Magnates. “There are quite a few regulators in Europe ‘revoking’ many crypto registrations due to lack of governance. These are rarely made public unless it’s a situation like this. We hope more audits and controls are taking place by regulators to ensure the stability of the market and secure investor protection.”

The suspension came when the troubled parent of the EU subsidiary,, nearly collapsed in merely days. The global exchange and more than 130 affiliates, including FTX US and Alameda Research, filed for Chapter 11 bankruptcy in the United States. Its CEO, Sam Bankman-Fried, also stepped down.

Only four of FTX affiliates, FTX Digital Markets, FTX Australia, FTX Express Pay, and LedgerX (operating as FTX US Derivatives), were not included in the bankruptcy filing.

To add to the troubles of FTX, the exchange was reportedly hacked over the weekend, draining at least $1 billion worth of cryptocurrencies.

European Business

FTX initially gained approval from the Cyprus regulator last March and obtained full authorization as a CIF in September. Though the Cypriot license did not allow the crypto exchange to offer crypto directly, it can provide derivative products. The license was also essential as the exchange can passport it to provide services within the entire European Economic Area (EEA).

“The Company is regulated by CySEC under the provision of Investment Services Law and is authorized to provide investment services in Derivatives and/or other financial instruments. However, it is not licensed by CySEC to engage in the direct trading of crypto assets,” the Cypriot regulator said in a statement.

The regulator justified its action as the exchange is under suspension for allegedly violating Cyprus laws around “the suitability of the members of the management body” and “the Safeguarding of Client Assets, Product Governance Obligations and Inducements, in relation…

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