FTX EU, the Cypriot arm of the collapsed crypto exchange FTX, has been rebranded as Trek Labs Europe under new ownership. The company recently reached a settlement with the Cyprus Securities and Exchange Commission (CySEC), agreeing to pay €200,000 for potential regulatory breaches.
Background: The FTX Era
The settlement relates to activities that occurred before the company’s rebranding and change in ownership. CySEC’s investigation focused on the period from March 2022 to mid-November 2022, which coincided with the global downfall of FTX. The regulator identified several concerns during this time, including organizational requirements, shortcomings in meeting the standards expected of Cyprus Investment Firms, issues with the clarity and accuracy of information provided to clients, and possible lapses in assessing whether products and services were suitable for clients. These matters were all tied to the company’s operations before its transition to new management.
Regulatory Actions
Following the collapse of FTX in late 2022, CySEC suspended FTX EU’s Cyprus Investment Firm (CIF) license. This action was taken to safeguard client assets and ensure proper oversight of the company. The suspension has been extended several times and, as of now, remains in effect. While the suspension prevents the company from taking on new business, it does allow for the processing of customer withdrawals and the return of funds.
New Ownership and Future Plans
Earlier this year, Backpack, a crypto exchange founded by former FTX and Alameda Research employees, acquired the Cypriot entity for approximately $32.7 million. This acquisition included a valuable MiFID II license, which could eventually allow Backpack to offer crypto derivatives and perpetual futures throughout Europe. Backpack initially planned to relaunch operations under the new brand in early 2025, but regulatory delays have pushed back those plans. The recent settlement with CySEC is seen as a positive step towards resolving outstanding issues and moving closer to reopening.
What’s Next?
Despite the change in ownership and the settlement, the CIF license remains suspended for now. However, the resolution with CySEC suggests that Backpack could soon be allowed to resume operations under the Trek Labs name. In the meantime, Backpack has begun the process of distributing claims to former FTX EU customers, working to return funds and restore confidence after the FTX collapse.