The Bahamas Securities and Exchange Commission said on Thursday that the agency seized all digital assets under the control of FTX’s Bahamian subsidiary, FTX Digital Markets Ltd. – to the tune of more than $3.5 billion – “for safekeeping.” after the cryptocurrency exchange collapse.
The regulator said in a press release that the funds were transferred to digital wallets under its sole control on November 1. On February 12, the day after FTX filed for Chapter 11 bankruptcy, after determining that “there was a significant risk of imminent dissipation” of the assets under FTXDM’s control based on information that the founder fell into unfortunately, Sam Bankman-Fried, provided about cyber attacks to the system.
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The funds are being held “temporarily”, the SCB said, while it awaits instructions from the Supreme Court of the Bahamas on whether the assets should be “turned over to the clients and creditors who own them” or to the court. appointed Joint Provisional Liquidators (JPL) in charge of disbanding FTXDM.
The seizure of the funds by the Bahamian watchdog has been the subject of controversy between the agency and FTX’s new CEO, John Ray III, who replaced Bankman-Fried and filed for FTX Chapter 11 in the US after taking control of the company. Bahamas-based FTXDM separately filed a Chapter 15 bankruptcy that has been filed with Chapter 11, and both parties have been clashing throughout the process thus far.
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The Bahamas Security Commission admitted last month to seizing FTXDM’s assets, but did not put a dollar amount on the figure at the time.
during his testimony before congress In mid-December, Ray accused Bahamian officials of seizing the funds with the help of former FTX leadership and claimed authorities were not cooperating.
“We have repeatedly asked them to clarify what they have been doing,” Ray said of the Bahamian officials. “We’ve been shut down by them.”
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Ray also said it appears that Bankman-Fried, who was arrested hours before the various charges linked to the FTX collapse, had attempted to undermine the US bankruptcy process by moving the company’s assets into accounts under the control of the Bahamian authorities.
Bahamian officials said in court documents that they requested a criminal investigation into FTX on November 2. 9 then Co-CEO of FTXDM Ryan Salame warned them in a phone call about alleged transfers of funds from clients of the exchange to sister company Alameda Research.
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