CySEC announced on Monday that FTX EU LTD initiated the procedures for customers to request final balances before withdrawing fiat funds from segregated accounts. The market supervisor believes the withdrawal process will go 'swiftly.'
FTX EU Begins Fiat Currency Withdrawal Process for Clients
In response to FTX EU announcing its initiation of processes to return segregated funds to investors under Cyprus Law, Dr George Theocharides, the Chair of CySEC, stated the supervisor is glad that regulatory efforts have led to this favorable outcome, following months of investor uncertainty and concern.
"We are grateful to the FTX Group Administrators for their collaboration and support towards these efforts. Safeguarding the interests of investors is of paramount importance and CySEC will continue to hold FTX EU Ltd to account to ensure all withdrawal requests are processed swiftly and appropriately," Theocharides added.
FTX EU, formerly known as K-DNA Financial Services LTD, is a European branch of Sam Bankman-Fried (SBF) US crypto exchange that collapsed a few months ago, in November 2022. When the US branch collapsed, funds belonging to European customers were frozen to ensure that future claims could be covered and deposits paid out.
Finance Magnates exclusively reported last week that FTX EU had launched a website that would allow FTX EU customers to apply for the withdrawal of funds owed to them.
FTX EU, a solvent entity, is now paying out its customers on https://t.co/MEw8Oz8vTk.Note: Almost none of FTX's EU citizens are FTX EU users, because for some reason, FTX EU only onboarded customers registered from March 2022. pic.twitter.com/gu56Vysvlc
— FTX 2.0pium (FTX Creditor) (@AFTXcreditor) March 30, 2023
The company confirmed the news a day later in an official press note.
FTX EU LTD (Cyprus) (formerly K-DNA Financial Services LTD) is commencing a process for its customers to request final balances on a dedicated website. Read details here: https://t.co/qamNICqGY4
— FTX (@FTX_Official) March 31, 2023
The information published by FTX EU reveals that the company will provide customers with a statement of fiat currency balances in accordance with MiFID II regulations. Following this process, customers of FTX EU, subject to sufficient funds, will be entitled to withdraw their fiat currency balance as segregated in designated accounts.
"The balances will be communicated and verified, and subsequently withdrawal requests may be submitted through the following website established for this purpose: ftxeurope.eu. Any withdrawal requests will be subject to customary know-your-customer and anti-money-laundering checks, and a customer's withdrawal may be delayed if bank or other account details have not been sufficiently verified," FTX EU commented.
This announcement pertains only to customers of FTX EU LTD who opened accounts through FTX.com/eu (i.e., after 7 March 2022) and does not affect customers of other FTX group businesses, even if located in Europe.
Before the shutdown of FTX.com international platform, FTX EU operated as a MiFID II-regulated investment firm offering trading in multi-asset derivatives, particularly with crypto assets as the underlying. CySEC has suspended its license and ordered FTX EU LTD to return funds to its customers who request withdrawals. Finance Magnates' check on CySEC's public register shows that the permit is still under suspension.
FTX Japan Back on Track
Regulators worldwide froze FTX affiliates' funds after the collapse of the US exchange to protect them from uncontrolled outflows. FTX's Japanese office resumed withdrawing client funds in late February through its Liquid Japan platform.
"In order to proceed with withdrawals, customers who have assets in their FTX Japan account would need to confirm the balance of their assets and transfer them to their Liquid Japan account," the exchange's official press release added.
Users withdrew $50 million from the $138 million in the branch's accounts in just one day. Information about the transfer of $157 million in frozen FTX-linked assets was also reported last week by cryptocurrencyexchange OKX.
Recently, Finance Magnates informed that FTX debtors agreed to sell Mysten Labs Inc. preferred shares back to the Web3 startup for $96 million, according to the fillings at the US Bankruptcy Court in Delaware.GMO heralds new investment and Komainu enhances custody. Check today's news nuggets!
This article was written by Damian Chmiel at www.financemagnates.com.
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