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Bahamas controls FTX customer assets worth $3.5bn

FTX generic 3

FTX generic 3

Late Thursday, Dec.29, 2022, the Securities Commission of the Bahamas stated that it was holding more than $3.5 billion in FTX client assets.

According to the official press release, the commission is temporarily holding the digital assets until the Bahamas Supreme Court orders it to return the funds to customers and creditors, or the liquidation administrator. The assets were given to the commission on Nov.12.

FTX was based in The Bahamas

From a Bahamas headquarters, Sam Bankman-Fried and his close friends ran FTX. On the other hand, Alameda Research, FTX, and more than 130 other affiliates filed for bankruptcy in the United States.

Following the filing for bankruptcy by FTX and its affiliates, the local FTX organization turned over management of the client assets it had been holding to the Bahamian financial market regulator.

The regulator, however, argues that the theft of at least $372 million worth of crypto during a cyberattack on the defunct exchange ultimately led it to seize FTX customers’ assets for safekeeping.

The Bahamas Securities Commission confiscated assets

The commission found a considerable risk of impending dissipation regarding the digital assets in FTXDM’s custody or control, which would be detrimental to its clients and creditors. As a result, the commission sought and received a court injunction to protect digital assets while exercising its regulatory authority, the Bahamas regulator stated.

The notification further stated that these customer monies are no longer accessible to Bankman-Fried or former CTO and co-founder of FTX Gary Wang. FTX has already denied that the Bahamian Securities Commission had instructed the bitcoin exchange to prioritize Bahamas-based customers’ withdrawal requests.

In the interim, civil and criminal investigations into FTX’s actions have been launched by the Bahamas’ authorities. Along with that, Bankman-Fried was also detained by Bahamas police on the island, and it occurred after US authorities in the US started to prosecute him for a crime.

SBF leaves the Bahamas

On Dec.21, FTX’s founder Bankman-Fried was returned to the United States. On a US$250 million bond, he was permitted release the next day and sent to live with his parents in California.

The executive director of the Bahamas Securities Commission, Christina Rolle, stated that the commission continues to conduct a complete and diligent inquiry into the causes of FTX’s failure and that all transferred assets will remain entirely under its control.

The disclosure comes the same week court records made it known Sam Bankman-Fried purchased Robinhood stock using money from Alameda Research.

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