Bahamian Securities Regulator Confirms Ordering Transfer of FTX Funds

UTC by Sanaa Sharma · 3 min read
Bahamian Securities Regulator Confirms Ordering Transfer of FTX Funds
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On November 15, FTX filed for bankruptcy in a court in New York to pursue US acknowledgment of the Bahamian liquidation processes.

Just when you thought FTX’s drama couldn’t be any more interesting, it gets better. FTX, which is a Bahamas-based cryptocurrency exchange, recently declared itself bankrupt. But there’s much more to the story. The company allegedly moved a massive amount of assets in FTX customer funds off the exchange. This has been alleged by a new filing by the embattled firm, and also verified by the Securities Commission of the Bahamas.

According to new FTX Chief Executive Officer John Ray, there exists valid proof that the Bahamian administration is accountable for proposing illegal access to the Debtors’ system to acquire virtual assets of the Debtors. The company has also confirmed that the co-founders Sam Bankman-Fried and Gary Wang were recorded mentioning that Bahamian authorities asked them to steer post-petition asset transfers.

While this is not the first time such an accusation has been levied on the Bahamian authorities, the regulatory body has finally accepted the allegations.

The agency now claimed that the authority asked for the movement of all virtual assets of FTX Digital Markets Ltd. to a digital wallet run by the Commission, and asserted that this new action was undertaken for ‘safeguarding’ purposes.

Recently on November 11, the crypto community marked several dubious money transfers in wallets associated with FTX. While the analyst calculated a cumulative loss of $663 Million, about $447 was speculated to be looted. The leftover was said to be hidden in safekeeping by the company itself.

Having said that, the directions by the SCB were most likely made two days following its freezing of the FTX funds and cancellation of its registration in the country.

It was initially stated that FDM’s assets could only be shifted from one place to another on the confirmation from the provisional liquidator designated by the Supreme Court.

On Nov 15, FDM filed for bankruptcy in a court in New York to pursue US acknowledgment of the Bahamian liquidation processes.

Brian Simms, who was nominated by the interim liquidator to supervise the bankruptcy procedures of FTX Digital Markets affirmed that FDM wasn’t legally allowed to file for Chapter 11 in the United States, and disapproved the filing.

An emergency motion that was introduced yesterday insisted that both 11 and 15 filings should be allowed in the Delaware-based US Bankruptcy Court to conclude the turmoil and safeguard the assets in an organized manner.

The news can be inching towards a legal battle between the US and the Bahamas, where the FTX was officially placed. According to SCB’s official statement, the Commission is not aware of its involvement in the US Chapter 11 Bankruptcy proceedings.

According to the case attorneys, the filing of the Chapter 15 Case without prior notice is an unabashed endeavor to dodge the official surveillance of the Court. The attorneys also claimed that the company’s co-founder Bankman-Fried was lobbying with the Bahamas’ government to this end.

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Sanaa Sharma
Author Sanaa Sharma

Sanaa is a chemistry major and a Blockchain enthusiast. As a science student, her research skills enable her to understand the intricacies of Financial Markets. She believes that Blockchain technology has the potential to revolutionize every industry in the world.

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