The worst fears of the FTX investors have finally come true and after a few days of the leaked balance sheet, FTX is filing for bankruptcy.
Out of nowhere, the entire cryptocurrency industry has dealt with a huge low blow. Unfortunately, this time, it was another major project that let down the entire crypto-verse.
The issue that was raised on November 8 about the FTX exchange using clients’ funds to back the FTX Tokens at Alameda Research has destroyed the platform’s entire image.
With the platform facing major financial crises, the FTX executives have decided to file for bankruptcy.
The CySEC is not happy
It has been reported that the exchange is now filing for bankruptcy. The sources have confirmed that FTX has reached out to the bankruptcy court in the United States to file for Chapter 11 bankruptcy.
However, the Cyprus Securities and Exchange Commission (CySEC) is not happy with the recent developments involving the FTX exchange.
The CySEC has, therefore, issued a statement that concerns the European arm of the FTX exchange. The statement has asked the European arm of the FTX exchange to halt its operations in the region.
Protection of Investors
The people familiar with the matter have claimed that the regulator is concerned about the safety of the investors. It wants to ensure that its funds are secure and do not end with another bad investment.
Therefore, the CySEC has asked FTX’s European arm to halt operations immediately. The matter does not end there because CySEC has demanded FTX’s counterpart take further actions for the investors’ safety.
The statement was reportedly issued by the regulator on November 9. The regulator has been closely monitoring the situation and it acted fast to ensure the safety of the European investors.
Things are Still Unclear
Even though the regulator has acted fast to protect the investors, there is still a major concern among market observers.
It has been raised by many market observers why CySEC chose FTX Europe among 130 other companies that are part of the FTX Group.
As FTX files for bankruptcy, all the entities coming under the FTX Group would be facing the same outcome. Still, it raises the question of why the CySEC only issued a statement for FTX Europe to cease operations.
It was in March when the CySEC granted approval to the FTX arm to operate and provide cryptocurrency services to the island nation.
The exchange is reportedly running its operations in Cyprus from the Switzerland headquarters.
Once again, another major exchange and its entire group have filed for bankruptcy. This is a major setback for the cryptocurrency industry and it would eventually push back the entire cryptocurrency industry.