Regulators in the Bahamas directed FTX to move digital assets to safeguard them for creditors exposed to the blowup. FTX said in its bankruptcy filing there was “credible evidence” the Bahamian government was “directing unauthorized access” to FTX’s systems. FTX and the Bahamas-based unit have filed separate bankruptcy protection petitions in the US. Loading Something is loading.
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A Bahamas regulator said Thursday it directed a Bahamas-based unit of FTX to move digital assets in an aim to safeguard them for creditors facing exposure to the breakdown of the crypto firm once valued at more than $30 billion.
The Securities Commission of the Bahamas said in a statement it made the move on November 12 by exercising regulatory powers given to it by the country’s Supreme Court. The Commission “took the action of directing the transfer of all digital assets of FTX Digital Markets Ltd. to a digital wallet controlled by the Commission, for safekeeping.”
The implosion of FTX ushered in a new CEO, John Ray III, who in this week’s updated US bankruptcy protection filing said there was “credible evidence” that the Bahamian government was responsible for “directing unauthorized access” to FTX’s systems to obtain digital assets. Ray is known for guiding Enron, the defunct energy firm, through its bankruptcy proceedings.
FTX said in its Chapter 11 bankruptcy petition that Bankman-Fried and FTX co-founder Gary Wang were recorded as saying regulators in the Bahamas instructed them to make “certain post-petition transfers” and that such assets were under custody on FireBlocks under the control of the Bahamian government.
“Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM,” the Commission said about its directive to FTX.
The Commission’s asset seizure may address questions about millions of dollars worth of crypto that appeared to be drained from FTX the day after the exchange filed for bankruptcy protection in Delaware.
FTX Digital Markets is seeking bankruptcy protection in New York under Chapter 15, which is used by foreign companies.