The Bahamas Securities Commission said Thursday that the agency has seized all digital assets under the control of FTX subsidiary FTX Digital Markets — in excess of $3.5 billion — “for protection” after Cryptocurrency exchange Collapse.
The regulator said in a press release that the funds were transferred to digital wallets under its exclusive control on November 12, the day after FTX filed for Chapter 11 bankruptcy, after determining “a significant risk of imminent dissipation” of assets under FTXDM’s control based on information provided by Sam Bankman. Fried, founder of FTXDM Electronic attacks on the system.
The SSC said the funds are being held on a “temporary basis,” while it awaits instructions from the Bahamas Supreme Court on whether to “turn the assets over to clients and creditors who own them” or to the court-appointed interim liquidators (JPLs) responsible for resolving FTXDM.
The seizure of funds by the Bahamas watchdog has been a source of contention between the agency and FTX’s new CEO, John Ray III, who Bankman Fried Store FTX’s filed for Chapter 11 bankruptcy in the US after taking control of the company. Bahamas-based FTXDM separately filed for Chapter 15 bankruptcy which was filed in Chapter 11 — and both sides have been chasing heads throughout the proceedings so far.
The Bahamas Security Commission last month acknowledged seizing FTXDM’s assets, but did not put a dollar amount on the figure at the time.
During that Testimony before Congress In mid-December, Ray accused officials in the Bahamas of taking the money with the help of former FTX leadership, and claimed that the authorities were uncooperative.
“We’ve repeatedly asked them to explain what they’re doing,” Ray said of the Bahamas officials. “We have been shut down by them.”
Ray also said it appeared to be Bankman Fried, who was arrested hours before the hearing Several fees Related to the collapse of FTX, they tried to undermine the US bankruptcy process by transferring the company’s assets to accounts under the control of the Bahamas authorities.
Bahamian officials said in court filings that they requested a criminal investigation into FTX on November 9 after FTXDM’s then co-CEO. Ryan Salameh told them in a phone call about alleged transfers of client funds from the exchange to sister company Alameda Research.