FTX EU (Now Trek Labs) Paid €200K in Latest CySEC Settlement

• The entity was renamed Trek Labs after Backpack acquired it.
• The regulator highlighted that the settlement came for possible violations before the change of name and shareholding structure.

The Cypriot entity of the fallen crypto exchange FTX (now renamed Trek Labs Europe under new ownership) has settled with the local regulator, paying a total of €200,000 for “possible violations” of regulations.

Possible Violations during the FTX Era

Although the Cyprus Securities and Exchange Commission (CySEC) settled with Trek Labs Europe, it highlighted that the possible operational violations occurred before the change of name and shareholding structure. Specifically, the settlement was based on the companys compliance assessment between March 2022 and mid-November 2022, when the crypto exchange collapsed.

According to the regulator, the possible violations were related to the organisational requirements to which Cyprus Investment Firms must comply, along with possible lapses regarding general principles and information provided to clients. Furthermore, there might have been lapses in the assessment of the companys appropriateness.

Interestingly, CySEC also settled with the local operator of Purple Trading, a retail contracts for differences (CFDs) broker, for €150,000.

The Cypriot regulator suspended FTX EU‘s CIF licence in mid-November 2022 after the collapse of its Bahamas-registered parent. The entity, however, was independent and operated outside of its parent’s questionable business practices.

New Owner, New Name

Despite the new ownership, the Cyprus Investment Firm (CIF) licence of the FTX-related entity remains suspended. However, the settlement now suggests that the regulator might soon lift the suspension, allowing Backpack to begin operations under the renamed entity.

Meanwhile, Backpack has also started the process of distributing claims to affected FTX EU customers.