Due to the broad contagiousness, authorities in Cyprus are considering removing FTX’s authorization to conduct digital asset trading in Europe. Sam Bankman-Fried’s exchange would be in grave jeopardy if this took place.
CySec May Revoke FTX EU’s Crypto License
FTX received an “operational license” in July. This came after getting permission from the Cyprus Securities and Exchange Commission (CySec). The regulatory body allowed SBF’s exchange to provide its services in every European market. Currently, Switzerland will be the site of a regional office, according to EthereumWorldNews.
Bloomberg claims that CySec may change its mind and revoke the license. FTX activities in Europe would be prohibited until further notice if this were to occur. As of this writing, the cryptocurrency exchange is the subject of several probes. Additionally, it is at the center of a multibillion-dollar controversy.
FTX Meltdown Calls for Regulatory Investigations
Investigations are ongoing into FTX and its American affiliate (FTX. U.S.). Several U.S. government authorities are conducting these investigations. They consist of the Department of Justice, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).
Regulators contacted Binance, another cryptocurrency exchange. The regulators sought to inquire about what knowledge Binance may possess regarding FTX’s operations. Binance notably backed out of a deal to buy FTX after looking into the company’s financial documents.
The cryptocurrency exchange has reportedly stopped withdrawals, according to complaints from customers who are unable to withdraw money. Justin Sun is the founded Tron (TRX). Sun plans to implement a mechanism that will allow token holders to redeem their tokens for other cryptocurrencies. These currencies include, among others, the Huobi token (HT) and Tron (TRX).
Mismanagement Of Customer Funds
Bankman-Fried said in a tweet that he needed funds to improve the financial crisis. SBF reported no up-to-date details on these efforts at the point of publishing.
An investment of over $6 billion is required for the cryptocurrency exchange to continue operating. The Wall Street Journal, CoinDesk, and Bloomberg all provided projections for this.
After lending client cash, the trading platform caused a sizable hole in Alameda Research’s financial statements. Bankman-Fried established Alameda Research.
Since FTX filed for bankruptcy, several of the company’s top executives and employees have left or voiced betrayal. According to specific reports, a few workers may have been aware of the improper management of customer funds and other options.
According to reports, Zane Tackett told VIP clients that the whole team “had 0 clues” of what was happening. Tackett oversaw Institutional Sales in his prior position.