The Cyprus Securities and Exchange Commission (CySEC) has officially lifted the suspension of Trek Labs Europe Ltd’s investment firm license, allowing the company to resume operations.
License Suspension Lifted
CySEC has lifted the suspension of Trek Labs, which was formerly known as FTX (EU) Ltd. This company, based in Cyprus, was part of the crypto ecosystem associated with Sam Bankman-Fried, providing services across the European Union. The license had been suspended since November 2022 due to regulatory concerns, but it is reported that Trek Labs has addressed the regulator's issues and can now resume its operations.
Regulatory Breaches and Penalty
CySEC previously imposed a €200,000 penalty on Trek Labs for a series of regulatory violations during the company's operation under the FTX brand. An investigation revealed that the investment firm may have fallen short of several standards, including organizational requirements and client communication standards. Despite this, Trek Labs has paid the penalty in full, allowing this chapter of regulatory scrutiny to close.
Operational Resumption and User Fund Recovery
The resumption of Trek Labs operations coincides with the initiation of the fund recovery process for FTX EU users through the Backpack exchange. Users can now begin accessing their frozen funds, though this requires completing KYC verification. It is important to note that not all clients are eligible for recovery, which depends on their registration date on the platform.
The lifting of the suspension on Trek Labs’ license and the start of the fund recovery process for users indicates a step towards restoring companies after the collapse of FTX and the potential rehabilitation in the crypto market for industry participants.
