The Cyprus Securities and Exchange Commission (CySEC) has extended the suspension of the Cyprus Investment Firm (CIF) license of the FTX (EU) Limited, the Cypriot subsidiary of the bankrupt cryptocurrency exchange, FTX, to March 31, 2023.

The decision to continue with the license suspension was reached on Monday, December 19th, CySEC said in a statement released on Friday. The extension is to allow the subsidiary firm “to proceed with the necessary actions in order to comply with the relevant provisions of the Investment Services and Activities and Regulated Markets Law of 2017,” CySEC explained.

The elongation comes over one month after the Cypriot financial markets regulator suspended the crypto exchange's EU subsidiary’s license over alleged violations of sections of the country’s regulated markets law. These include having unsuitable members on its management board and not meeting the organization's requirements for safeguarding clients’ assets.

CySEC said the decision was taken “for the protection of investors and the orderly operation of the market,” and gave the subsidiary firm one month to take necessary actions to comply with the provisions.

CySEC Places Restrictions on FTX EU License

The first suspension of the FTX (EU) Limited license followed the early November collapse of the Bahamas-headquartered cryptocurrency exchange, which later filed for bankruptcy protection in the United States. The suspension came only two months after the subsidiary gained the Cypriot regulator’s authorization to offer its digital asset services in the country and across the EU region.

In the new statement, CySEC noted that FTX EU Limited is not permitted to offer executive investment services or activities in the country. In addition, the subsidiary can not enter into any business transaction with any person or accept any new client. Furthermore, the subsidiary firm can not advertise itself as a provider of investment services.

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However, the subsidiary could “complete all its own transactions and those of its clients which are before it, in accordance with client instructions.” Moreover, the firm could return all funds and financial instruments belonging to clients, CySEC pointed out.

Meanwhile, in its bankruptcy filing, FTX added FTX.com, its US subsidiary, FTX.US, Hong Kong-based subsidiary, Alameda Research Limited, and “approximately 130 additional affiliated companies," to its proceedings. However, the proceedings excluded four affiliates: FTX Digital Markets, FTX Australia, FTX Express Pay and LedgerX (operating as FTX US Derivatives).

Taking Aim at FTX

Meanwhile, Japan’s Kanto Local Finance Bureau, which first ordered FTX Japan to halt its local operations in the country in early November, recently moved the suspension of the subsidiary to March 9, 2023. However, the local regulator noted that it could reverse the suspension if a system to properly conduct the overall operations of the subsidiary’s digital asset exchange business is developed and subjected to its confirmation.

Also, the Australian Securities and Investments Commission in mid-November suspended the license of FTX Australia Pty Limited, until May 15, 2023. However, the Aussie regulator permitted the subsidiary to offer limited financial services until December 19.

At the same time, Sam Bankman-Fried, FTX's Co-Founder and CEO, is facing criminal charges in the United States over the failure of the once-beloved crypto exchange which was estimated to have cost investors over $8 billion in losses. The embattled entrepreneur was granted bail on Thursday on a hefty $250 million personal recognizance bond secured by his parents.