On April 11th, a Swiss court granted FTX Europe’s petition for a moratorium proceeding, allowing the embattled crypto company to explore strategic alternatives, including the potential sale of its business.
FTX Europe is the European subsidiary of the FTX Group, a once high-flying crypto giant that filed for bankruptcy protection last November. The venture offered FTX Group products to European clients via a licensed investment firm across the region and was headquartered in Switzerland.
“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.”
FTX Europe Moratorium
The moratorium proceeding will not impact the previously announced process for confirming customer balances in preparation for allowing the withdrawal of funds from the FTX EU platform.
The process of allowing customers to withdraw funds locked up since its parent firm’s bankruptcy protection filing began two weeks ago, and FTX EU set up a website to enable customers to verify their balances and make withdrawal requests.
The Cyprus Securities and Exchange Commission (CySEC) also announced an extension of FTX EU’s license suspension until September-end. The company’s Cyprus Investment Firm (CIF) license was suspended on November 11th and extended until the end of March 2023 before the latest update.
The FTX Group’s implosion was one of the biggest scandals in recent history. The crypto empire was once worth $32 billion, but 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.
The report also highlighted egregious accounting errors that cost the company a fortune, threats against employees who spoke up about alleged wrongdoings, and several other issues. As a result, FTX Group filed for bankruptcy protection in November 2022, and its various subsidiaries have been embroiled in legal proceedings ever since.
FTX Europe’s petition for a Swiss moratorium proceeding is the latest development in the FTX saga. The moratorium will provide FTX EU with some breathing room to explore strategic alternatives, including the potential sale of its business.
It remains to be seen what will happen to FTX EU and the other subsidiaries of the FTX Group. Still, granting the moratorium petition is undoubtedly a step forward in the ongoing legal proceedings surrounding the company.