- FTX EU has a new website where affected users can register to recover their funds.
- The European branch of FTX was only in operation for eight months before the company’s collapse.
- Regulators in Cyprus have made provisions for the subsidiary to pay back user funds.
Many clients impacted by the collapse of FTX still have their funds tied up in the fallen crypto exchange. However, certain regional customers will be happy to see progress on plans to return their funds.
As of Friday, March 31, the European branch of FTX, FTX EU, has launched a new site to allow European customers to submit withdrawal requests. The site offers no products, information, or services but rather a simple portal to check user balances and request a withdrawal.
Users of FTX EU will now have the opportunity to try and recoup their money, but the number of users this will benefit is not expected to be very large.
A Small Pool of Users?
FTX EU, based in Switzerland and with a regional headquarters in Cyprus, was an attempt at global expansion by the then-high-flying exchange. This new subsidiary made FTX services available to users in the Europe Economic Area and the Middle East but only operated for eight months.
It is unclear how many users were registered with the EU branch, but the company’s short lifespan means the number of users is not expected to be very substantial. On the other hand, FTX JP, the Japanese subsidiary, announced on February 20th that it would allow the withdrawal of both fiat and crypto from the 21st.
Through unique protection under Japanese Financial Laws, users of FTX Japan gained access to their funds, as Japanese Financial Law mandates that cryptocurrency exchanges must separate customers’ deposits.
FTX EU’s regulation fell to the Cypriot SEC (CySEC), where it was licensed. The CySEC suspended the operating license following the failure of FTX. However, in late December 2022, CySEC extended the suspension of FTX EU’s license to March 2023. This allowed the firm “to proceed with the necessary actions to comply with the relevant provisions of the Investment Services and Activities and Regulated Markets Law of 2017.”
In that extension, CySEC said the subsidiary could “complete all its own transactions and those of its clients which are before it, in accordance with client instructions.”
On the Flipside
- In January, it was announced that FTX officials overseeing its bankruptcy had recovered more than $5 billion in cash and other liquid assets that could be used to help repay creditors. However, no plan has been outlined as yet.
Why You Should Care
FTX’s collapse is one of the most notorious failures in the crypto space and has seen heightened regulatory scrutiny across the U.S. due to its impact on clients. Recovery of the majority of user funds would be welcome, but the reputational damage would remain.
Read more about FTX Japan and how it paid back its customers:
FTX Japan Delivers on Promise to Re-Open Withdrawals.
Read more about the SEC’s approach to crypto regulations:
SEC Chair Gensler Insists Crypto “Regulations Already Exist” Ahead of Hearing.