Bahamas Securities Commission says it seized $3.5B in FTX assets ‘for safekeeping’

The Bahamas Securities Commission announced Thursday that it has seized all digital assets under the control of FTX Digital Markets Ltd., the Bahamas subsidiary of FTX. This is more than his $3.5 billion, and was “to keep it safe” following the collapse of cryptocurrency exchanges.

In a press release, the regulator said the funds were placed under exclusive custody on Nov. 12, the day after FTX filed for Chapter 11 bankruptcy, after it determined that there was “a material risk of imminent loss” of the assets. said it had been moved to its digital wallet. FTXDM’s control is based on slanderous information provided by founder Sam Bankman-Fried regarding cyberattacks on the system.

The Bahamas’ securities regulator revealed Thursday that it seized more than $3.5 billion in digital assets managed by FTX Digital Markets Ltd. after the crypto exchange collapsed. ((AP Photo/Marta Lavandier, File) / AP Newsroom)

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SCB said the funds were on hold “temporarily” and is awaiting direction from the Supreme Court of the Bahamas on whether the assets should be “delivered to customers and owner creditors” or to the court. said that Appointed Joint Provisional Liquidators (JPL) to be responsible for unwinding FTXDM.

The seizure of funds by a Bahamian watchdog has been the cause of a feud between FTX’s new CEO, John Ray III, and FTX. John Ray III replaced Bankman-Fried and filed for Chapter 11 bankruptcy in the United States after taking control of FTX. His Bahamas-based FTXDM filed separately for Chapter 15 bankruptcy, which was incorporated into Chapter 11.

FTX Crypto Derivatives Exchange Chief Executive Officer John Ray III speaks during a hearing before the House Financial Services Committee investigating the FTX bankruptcy in Washington, DC, Tuesday, December 13, 2022. (Aldrago/Bloomberg via Getty Images/Getty Images)

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The Bahamas Security Commission confirmed last month that it had seized FTXDM assets, but did not disclose the amount at the time.

During testimony before Congress in mid-December, Ray accused Bahamian officials of receiving the funds with the help of former FTX leaders, and claimed the authorities were uncooperative.

Ray said of Bahamian officials, “We have repeatedly asked them to clarify what they have been doing. ‘We were shut down by them.’

Sam Bankman-Fried leaves New York City federal court on Thursday, December 22, 2022. The former CEO of FTX and Alameda has been released on $250 million bail. (Charles Guerin/Abaca for Fox News Digital/Fox News)

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Mr. Ray also said Bankman-Fried, who was arrested hours before the hearing on several charges related to the FTX demise, transferred the company’s assets to accounts controlled by the Bahamian authorities, thus allowing the United States to He said he appeared to be trying to undermine the company’s bankruptcy process.

Bahamian officials confirmed that FTXDM co-CEO Ryan Salame called FTXDM on Nov. 9 about alleged transfers of customer funds from the exchange to sister company Alameda Research. He said he had submitted to the court that he had requested a criminal investigation against him.

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