FTX Europe’s request for a Swiss moratorium proceeding has been granted by a court on April 11th. FTX Europe is the European subsidiary of the global cryptocurrency giant now in collapse.
The Cyprus Securities and Exchange Commission (CySEC) also announced an extension of FTX Europe’s license suspension until September-end.
FTX Europe Moratorium
According to the official press release, the moratorium process will help FTX Europe to explore strategic alternatives, including a potential business sale. This would be done in line with US Bankruptcy Court-approved bidding procedures.
“FTX Trading Ltd. (d.b.a. FTX.com) and its affiliated debtors (together, the “FTX Debtors”) today announced that the Board of Directors of debtor FTX Europe AG, the holding company of the FTX European business, has filed a petition for a Swiss moratorium proceeding (the “Moratorium”). A Swiss court granted the Moratorium on April 11, 2023.”
The announcement comes two weeks after FTX Europe authorized the withdrawal of customers’ funds that had been locked up since its parent firm filed for bankruptcy protection in November 2022. A website was set up for customers to verify their balances and request withdrawals.
FTX Europe confirmed that the moratorium will have no impact on the previously announced process for verifying customer balances and withdrawal of funds from its platform.
The venture was launched in March 2022 and offered investment products to European clients via a licensed investment firm across the region. It was headquartered in Switzerland.
A Respite From Cyprus’s Regulator
CySEC announced that the FTX Europe authorization suspension will be extended until the end of September 2023. The company’s Cyprus Investment Firm (CIF) license had initially been suspended in November 2022 and was extended until the end of March.
The FTX implosion was one of the biggest scandals in recent history. The crypto empire was once worth $32 billion. However, shocking claims regarding its internal workings continue to make headlines.
A recent report compiled by FTX Trading and its affiliated debtors reveals lack of risk management, inadequate record keeping, poor cybersecurity, and Sam Bankman Fried’s overreaching role in any decision-making that resulted in significant control failures. Egregious accounting errors cost the company a fortune as well as threats against employees who spoke up about alleged wrongdoings and several others, also made it to the report.