Bahamas Security Regulator Seizes the FTX Assets valued at $3.5B

Key takeaways:

  • The Bahamas securities regulator has seized assets totaling $3.5 billion from FTX.
  • The cost depends on the market price at the time of transfer.

The Securities Commission of The Bahamas declared in mid-November that it had mandated the transfer of all funds from FTX’s cryptocurrency wallets to a wallet under its control. To “defend the interests of clients and creditors,” according to the commission, “prompt interim regulatory action” was crucial.

In order to resolve issues impacting the creditors, customers, and stakeholders of FTX Digital Markets [FDM] internationally and to achieve “the best” result, the securities regulator further said that it would work with other regulators and authorities in several jurisdictions moving forward.

On Thursday, the regulator stated that it is temporarily holding the company’s assets worth $3.5 billion. The pricing is specifically dependent on the going rate at the time of transfer. After that, the commission plans to give them to the customers and creditors who genuinely own them.

Sam Bankman-Fried and Gary Wang, the two founders of FTX, also lost access to the assets following the transfer’s conclusion in November.

The commission’s executive director, Christina Rolle, stated unequivocally as much in an affidavit submitted to the Bahamas Supreme Court. Rolle stated:

“All transferred assets were and remained under the sole control of the commission.”

FTX’s legal team also resisted a request for internal documents from its Bahamian subsidiary earlier this month.

They mainly said that they “do not trust” the Bahamian government regarding the information that may be used to steal the company’s assets. After FTX declared bankruptcy, Bahamian authorities hired liquidators to wind up the company’s foreign trading operations.

Another recent FTX-related event was Liquid, the exchange’s owned platform, which declared its intention to restore customer funds in 2023.

The platform’s plan to create a system that permits withdrawals by consumers of FTX Japan and Liquid Japan was described in the formal notice that was just released.

Sam Bankman-Fried, the company’s founder and former CEO who was located in the Bahamas, was later charged with fraud, conspiracy to launder money, and conspiracy to defraud the US and break campaign financing rules in the US. He was released on a $250 million bond after being extradited to the US last week.

Deep Dalal
Deep Dalal

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