FTX Europe Bahamas-based crypto exchange expands into Europe

TL;DR Breakdown

• FTX cryptocurrency exchange establishes a new European entity.
• The platform obtained a regulatory license from CySEC.
• The platform further plans expansion into the Middle East.

According to recent reports, the Cyprus Securities and Exchange Commission (CySEC) granted the FTX crypto exchange a regulatory license. Following CySEC’s approval, the Bahamas-based crypto exchange has grown into Europe by creating a new entity, FTX Europe.  

FTX European entity

According to media reports, the FTX Europe entity is on track for success. FTX’s main cryptocurrency exchange is in the seventh position in the crypto market as measured by market capitalization. Also, after the European entity completes the set-up of the new entity in Europe, the exchange will begin serving customers across the Middle East. However, the investment-expansion portfolio remains unclear on which nations to include.

FTX is a decentralized cryptocurrency exchange that focuses on derivatives, options, volatility instruments, and leveraged tokens. It was founded in 2018 by Sam Bankman-Fried, an MIT graduate who previously worked at Jane Street Capital’s international exchange-traded fund division.

After relocating from Hong Kong, the crypto exchange is managed in Antigua and Barbuda and has its headquarters in the Bahamas. The Securities Commission of the Bahamas regulates the crypto trading platform.

The expansion is not a surprise to the blockchain industry. Several reports note that the crypto exchange has increased in popularity and adoption following the Russia-Ukraine war. According to Cryptopolitan, each Ukrainian platform user received a donation of $25 from FTX. The donation is a gesture to ease survival in times of uncertainty to the Ukrainian people.

FTX Europe is the second affiliate of the original FTX crypto exchange. Its American counterpart, FTX US, debuted in May 2019. The new entity is based in Switzerland and has a regional headquarters in Cyprus. The new branch will provide regulated cryptocurrency investment products in the European Economic Area (EEA) countries.

Established Domain in Europe

Cyprus is a highly regarded jurisdiction for investment firms, and it allows regulated businesses to do business in the entire European Economic Area (EEA). The EEA covers the European Union and three other nations: Iceland, Liechtenstein, and Norway. Cyprus CySEC’s acceptance of FTX’s domain establishes a new bar for cryptocurrency exchanges in Europe. FTX Europe will serve the citizens and residents of 30 European states.

Patrick Gruhn, a Swiss legal firm Crypto Lawyers LLC partner, will lead the Europe entity. The company recently raised $420 million in a funding round valued at around $25 billion. Following the funding round, the US subsidiary received a total of $8 billion.

Following the European expansion, Sam Bankman-Fried, the founder and CEO of FTX, remarked: “As we continue to grow, we are constantly looking at opportunities to become appropriately licensed and regulated in every market we enter. We’ll be interacting with regulators in various countries across Europe to continue to provide a safe and secure environment for people to trade crypto.”

The exchange also purchased the Japanese cryptocurrency exchange Liquid to expand its presence in South East Asia. It isn’t the first time the crypto exchange has made headway in Europe. In 2020, the exchange announced a collaboration with CM-Equity AG, a German investment company. The German-based firm is a white label solution that offers KYC and AML services, compliance standards, securities custody, and other services to cryptocurrency exchanges.

The apparent head of FTX Europe, Patrick Gruhn, concluded by saying: “We’re excited to bring FTX’s innovative offerings to the European markets and that CySEC officially approved our domain. Europeans will now be able to use FTX’s best-in-class trading platform to invest in a wide range of cryptocurrencies derivatives thru a regulated investment firm.”