Following the turmoil, FTX’s European license will now be issued by Cypriot regulators, according to reports.
The finalization of the suspension will take place on Friday, Bloomberg said, citing people familiar with the matter. Meanwhile, on Nov 9, CySEC requested FTX Europe will “suspend operations and immediately proceed with several actions to protect investors”
About two months ago, the crypto exchange FTX announced that it had obtained an EU license that can be used throughout Europe. FTX is licensed by the Cyprus Securities and Exchange Commission. The exchange must meet a number of requirements outlined in the European Union’s MiFID II directive. Some of the requirements include segregation and protection of client funds, business transparency, and capital adequacy.
Meanwhile, a few months after obtaining the license, FTX was investigated when balance sheets related to its sister company Alameda Research were leaked. The balance sheet reveals the liabilities and holdings of FTT – the FTX exchange token.
After that, Binance CEO Changpeng Zhao (CZ) announced will liquidation of all FTT holdings. According to Binance Co-founder Yi He, the company’s decision to sell its holdings of FTT was based solely on a a purely investment-related exit decision.
However, some believe there is another reason for it investors to panic and the FTT token collapsed, affecting the crypto market and the exchange’s reputation. As reported by Blockchain.News, the fall of FTX is possible undermine the crypto regulatory lobby.
Securities and Exchange Commission (SEC) Chairman Gary Gensler, in an interview with CNBC, said since the exchange has a huge influence on the board with many top-profile celebrities as its ambassadors, giving massive influence through investors.
According to Gensler, investors and the public can become victims of celebrity promotion – a trait that was very visible last year. Gensler added, “I think that investors need better protection in this space. It’s an uneven field, but there is regulation.”
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