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Since FTX filed for bankruptcy, there has been a power tussle between the exchange’s current leadership and the liquidators appointed by the Supreme Court of the Bahamas.
The Securities Commission of the Bahamas (SCB) has issued a statement to confirm the amount of money belonging to FTX creditors it has in its custody. The commission issued this statement to correct what it called “Material Misstatements made by Chapter 11 Debtors” with respect to its role in the bankruptcy proceedings of the defunct trading platform’s Bahamian entity, FTX Digital Markets.
While the regulator revealed last year that it is currently in the control of $3.5 billion of funds belonging to FTX creditors, the exchange’s representatives reportedly made public claims that the funds are just $296 million. The commission said these claims were a result of the lack of due diligence on the part of the exchange’s Chapter 11 Debtors and it considered it an affront to the commission’s competence across the board.
“The Chapter 11 Debtors chose not to utilize their ability to request information from the Joint Provisional Liquidators pursuant to a court order of the Supreme Court of The Bahamas that the Commission obtained in an effort to allow the Chapter 11 Debtors to obtain this information,” the commission said in a statement, adding that “The US Debtors’ continued lack of diligence when making public statements concerning the Commission is disappointing, and reflects a cavalier attitude towards the truth and towards The Bahamas that has been displayed by the current officers of the Chapter 11 Debtors from the date of their appointment by Sam Bankman-Fried.”
Besides this, the SCB also claimed the exchange made other material misstatements bordering on the fact that the cryptocurrencies under the care of the regulator were stolen. In response, the SCB said these claims were not based on any substantiated proof and that John Ray III had never reached out to the commission to get any form of clarification before making public claims to that effect.
Are the Bahamian Securities Regulator and FTX Officials Working in Creditors’ Interests?
Since FTX filed for bankruptcy, there has been a power tussle between the exchange’s current leadership and the liquidators appointed by the Supreme Court of the Bahamas. The FTX Empire in its full bloom maintained tens of entities with headquarters in the Bahamas. While FTX officials wanted to conduct all of the proceedings outside of the Bahamas, the regulators in the island nation maintained the jurisdictional right to manage the liquidation of the Bahamian entity.
With the conflict of interest and rancor in the handling of the exchange’s assets, there is now a concern about whether the primary goal of both the SCB and FTX officials is to work for the exchange’s creditors to be repaid in the end.
The entire bankruptcy proceedings are currently fragmented and former Chief Executive Officer, Sam Bankman-Fried (SBF) is currently billed to appear before a court today to commence the trials for his fraud charges. As reported earlier by Coinspeaker, SBF is expected to plead not guilty in antagonism to the guilty plea of his former comrades Gary Wang and Caroline Ellison.