FTX.com’s license to operate an investment business in Europe has been suspended by the Cypriot financial regulator, just hours after the crypto exchange filed for bankruptcy in the US.
(Bloomberg) — FTX.com’s license to operate an investment business in Europe has been suspended by the Cypriot financial regulator, just hours after the crypto exchange filed for bankruptcy in the US.
The Cyprus Securities and Exchange Commission said it had suspended FTX Europe’s license on suspicion of alleged violations of several laws.
It stated that “the company does not appear to comply at all times” with the conditions of its authorization. Other alleged violations included laws relating to the suitability of members of management, and FTX’s safeguarding of customer assets.
“The above decision was reached for the protection of the investors and the orderly operation of the market,” the regulator said in a filing.
FTX Europe gained its license in Cyprus two months ago after acquiring a local business earlier this year, a move which permitted it to operate its services across the European Union, Norway, Lichtenstein and Iceland.
Bloomberg News first reported the potential suspension earlier on Friday.
Read More: FTX Empire Goes Bankrupt in Sudden Fall of Bankman-Fried (1)
The European entity was one of more than 130 entities affiliated with FTX that were part of a joint bankruptcy filing in Delaware on Friday.
FTX first began experiencing issues with processing customer withdrawals on Monday, and navigated several rescue talks before collapsing.
Though a Chapter 11 bankruptcy process allows a firm to continue operating while they work out a plan to repay creditors, the decision by CySEC means FTX Europe is not permitted to carry out investment services or accept any new clients.
FTX did not immediately respond to a request for comment.
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