The FTX EMEA Empire That Never Wasby Matthew Allen, SWI swissinfo.ch January 3, 2023
If you could peer into the mind of Sam Bankman-Fried, what would you see? Maybe it doesn’t bear thinking about. In the summer, empire building in Europe, the Middle East and Africa was very much on the mind of the FTX crypto mogul.
I’ve already uncovered plans of the FTX crypto group to buy the Swiss NPB Neue Privat Bank, which were frustrated by the financial regulator’s demands. But that was just the tip of the iceberg.
According to documents I’ve seen, the Swiss-based FTX Europe was to be housed under a Cypriot holding company (FTX EMEA) that would be armed with a $300 million war chest for acquisitions, including NPB.
By the late summer, FTX had drawn up a shopping list of targets that encompassed banking, digital payments, brokerage services and blockchain-based derivatives trading.
Had all gone to plan, FTX would have controlled entities based in Switzerland, Cyprus, Britain, Ireland, Germany, Luxembourg, the United Arab Emirates and various parts of Africa.
But nothing went to plan. Even before FTX crashed into bankruptcy in November and faced subsequent fraud charges, the group had apparently dropped plans to acquire some target companies, according to sources.
Among the items crossed off the shopping list between July and November were Swiss fintech payments firm Klarpay and the Luxembourg-based BTC Africa, which operates the blockchain payments service BitPesa in Africa.
Clients trapped on FTX Europe
We know that the expansion of the Swiss-based FTX Europe into a vast EMEA operation run from Cyprus didn’t happen. But what happens now with the FTX Europe that does exist?
FTX Europe was created when FTX bought the Swiss company Digital Assets for more than $300 million in November 2021. It was officially unveiled as an FTX entity in February of this year and later gained licenses to trade in Cyprus and Dubai (now suspended).
The business model is creating digital versions of financial assets, with a focus on derivatives, that trade on blockchains. When FTX group went into bankruptcy FTX Europe had well over 40,000 active accounts spread all over Europe.
These now frozen accounts contained derivative positions with a nominal value of over CHF45 million plus around CHF5.5 million in cash when FTX filed for bankruptcy on November 11.
FTX’s liquidator appears willing to sell FTX Europe along with other regional divisions that were unconnected with the alleged fraud taking place at group HQ in the Bahamas.
We’ll have to wait to see how that pans out – which is when I look forward to reconnecting with more tales of crypto’s biggest bust.