FTX Europe – the European subsidiary of the now-collapsed global crypto giant – has filed a petition for a Swiss moratorium proceeding, which was granted by a court on April 11th.
Meanwhile, the CySEC also announced extending FTX Europe’s license suspension until September-end.
According to the official press release, the proceeding is expected to help the embattled company to explore strategic alternatives, including the previously disclosed potential sale of its business pursuant to 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 latest development comes almost two weeks after FTX EU started the process of allowing customers to withdraw funds locked up since its parent firm filed for bankruptcy protection last November. The European arm even set up a website to enable customers to verify their balances as well as make withdrawal requests.
FTX EU confirmed that the Moratorium will have no impact on the previously announced process for confirming customer balances in preparation for allowing the withdrawal of funds from its platform.
The venture was launched in March 2022, around seven months before the SBF-led FTX Group and its 130 affiliated companies officially filed for bankruptcy. It offered company products to European clients via a licensed investment firm across the region and was headquartered in Switzerland.
The Cyprus Securities and Exchange Commission (CySEC) also announced granting an extension on the suspension of FTX EU’s authorization until the end of September this year. The company’s Cyprus Investment Firm (CIF) license was initially suspended on November 11th, which was then extended until the end of March 2023 before the latest update.
The FTX implosion was one of the biggest scandals in recent history. The crypto empire was once worth $32 billion. While the market has since recovered, shocking claims with regard to its internal workings continue to make headlines.
A recent report compiled by FTX Trading and its affiliated debtors revealed a lack of risk management, inadequate record keeping, poor cyber security, and Sam Bankman Fried’s overreaching role in any decision-making that resulted in significant control failures.
Egregious accounting errors that 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 45-page-long report.