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24 June, 2024

Cyprus regulator to suspend FTX's license

Friday’s news is the latest blow to Sam Bankman-Fried’s crypto empire

Source: The Block

FTX's European Union license in Cyprus could be suspended in yet another blow to Sam Bankman-Fried's crypto exchange, according to Bloomberg.

FTX Europe looks set to have its European Union investment firm license suspended as soon as today, Bloomberg reported, citing people familiar with the matter. The exchange received the license — which enables it to operate across Europe — a little under two months ago.

Bankman-Fried's exchange was granted the license by the Cyprus Securities and Exchange Commission. The license requires FTX Europe to meet standards outlined in the European Union's MiFID II directive. The standards include the segregation and protection of client funds, business transparency and capital adequacy.

FTX first came under scrutiny last week when a balance sheet relating to its sister trading shop Alameda Research was leaked. The balance sheet showed significant liabilities and holdings of FTT, FTX's exchange token.

Pressure from Binance's threatened sales of FTT put increasing pressure on FTX and its trading arm. By Tuesday, Binance had agreed to acquire the struggling exchange — but the deal was off on Wednesday after a review of FTX's finances.

In the days since rumors over the firm's potential insolvency have grown to a fervor. The exchange is seeking to raise more than $9 billion to plug a financial shortfall, Reuters reported on Thursday.

Zane Tackett, head of institutional sales at FTX, resigned on Nov. 8 and sent a letter to clients stating that his team was "completely in the dark" about the firm's potential insolvency over the course of this week.

FTX had no comment to add when contacted by The Block.

Cyprus  |  crypto

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