The Malta Financial Services Authority published its first statement on the international crypto exchange FTX today (17 November) citing how the Cyprus Securities and Exchange Commission had notified it about "wholly suspending" the EU licence of the collapsed crypto business.
"The Cyprus Securities and Exchange Commission has notified the Malta Financial Services Authority that, with effect from 11 November 2022, it has wholly suspended the authorisation of FTX EU Ltd pursuant to section 10(1) of Directive DI87-05 for the withdrawal and suspension of authorisation (DI87-05), as there are suspicions of alleged violations."
The statement further said for as long as the suspension of the authorisation is in force, and as provided for in section 9 of DI87-05, the company is not permitted to: provide/carry out investment services/activities; enter into any business transaction with any person and accept any new client; and advertise itself as a provider of investment services.
The Company, provided this is consistent with the wishes of its existing clients, may proceed with the below actions, without such actions being considered as breach of section 7(a) of DI87-05:
complete all its own transactions and those of its clients which are before it, in accordance with client instructions; and
return all funds and financial instruments which are attributable to its clients.
The Times of Malta had reported earlier this week that FTX set up two companies in Malta earlier this year.
It said FTX Malta Gaming Services Limited and FTX Malta Holdings Limited were registered as local companies in April 2022. Both listed Sam Bankman-Fried, the billionaire founder of FTX Trading, as their sole director.
The local paper further reported that a spokesperson for the Malta Financial Services Authority had said neither of those two firms was licensed to carry out any activities related to virtual financial assets, or cryptocurrencies, in or from Malta.
The MFSA said it was nevertheless "monitoring the situation internationally" to keep an eye on the potential impact FTX's bankruptcy could have on local licence holders.
International regulators are continuing to respond to the FTX fiasco as it unfolds and the many implications of the unravelling of the complex crypto exchange business are digested.
The collapse of FTX has raised "very serious allegations that amount to potential fraud", Singapore's finance minister and deputy prime minister said on 17 November.
In a report by Reuters, Lawrence Wong said recent developments in the crypto market reinforced the city-state's position that it was "on the right track" in focusing on digital assets innovation, but also taking a strong stance against crypto speculation and trading by retail investors.
Earlier this week, the Australian Securities & Investments Commission suspended the Australian financial services licence of FTX Australia Pty Ltd until 15 May 2023 after it was placed into voluntary administration on 11 November 2022.
Until 19 December 2022, FTX Australia can continue to provide limited financial services that relate to the termination of existing derivatives with clients, it said.
ASIC further said it was monitoring this situation closely and speaking regularly with international regulators and the external administrators.
