FTX EU Archives | MarketsXplora

Key Insights CySEC fined Trek Labs Europe (formerly FTX EU) €200,000 for possible violations committed before the crypto exchange’s collapse in November 2022. The infractions—organisational, client information, and appropriateness assessment failures—occurred prior to the company’s rebranding and acquisition by Backpack. NICOSIA (MarketsXplora) — The Cyprus Securities and Exchange Commission (CySEC) has reached a €200,000 settlement with Trek Labs Europe Ltd, formerly known as FTX EU Ltd, over possible regulatory violations committed before the collapse of its parent company. The settlement follows a regulatory investigation into the operations of the company during the period from March 2022 to November 11, 2022. At the time, the entity operated under the FTX EU brand before undergoing a change in name and shareholding structure. The possible breaches concern the Investment Services and Activities and Regulated Markets Law of 2017. CySEC’s probe found that the company may have failed to meet several key regulatory requirements during the assessed period. These include violations of Section 22(1), related to organisational obligations outlined in Section 17; Section 25(1), covering general conduct principles and client information; and Section 26(3)(a), pertaining to the appropriateness assessments required of Cyprus Investment Firms (CIFs). Trek Labs Europe has paid the full €200,000 settlement amount. CySEC emphasized that the violations in question occurred before the company's ownership transition, distancing the current operators from the compliance issues under investigation. A Turning Point for CySEC FTX EU Case as Backpack Eyes European Launch The CIF licence of the company—then operating as FTX EU—was suspended by CySEC in November 2022, shortly after the collapse of FTX’s Bahamas-based parent company. The suspension has since been renewed multiple times. Earlier this year, the Cypriot entity was acquired by crypto exchange Backpack for a reported $32.7 million. The acquisition included the highly sought-after Markets in Financial Instruments Directive II (MiFID II) licence, which would permit Backpack to offer crypto derivatives and perpetual futures across the European Union. Initial plans to commence operations in the first quarter of 2025 have reportedly been delayed. Despite the acquisition, the CIF licence remains suspended. However, the recent regulatory settlement has raised speculation that CySEC may soon lift the suspension, paving the way for Backpack to begin operations under the Trek Labs name. Meanwhile, Backpack has initiated the process of distributing claims to former FTX EU customers affected by the collapse. In a separate development, CySEC also reached a €150,000 settlement with the operator of Purple Trading, a retail contracts for differences (CFDs) broker, over unrelated regulatory issues. The settlement with Trek Labs is the latest example of Cyprus’ efforts to clean up the regulatory fallout from the FTX debacle, as global crypto platforms seek to use Cypriot licences as entry points into the broader European market. Exchanges such as Kraken, Coinbase, and Crypto.com have all pursued similar strategies by acquiring Cyprus-based brokers, although some have yet to launch their local offerings.

Cyprus Regulator Settles with Former FTX EU Entity Over Pre-Collapse Violations

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