Regulator rejects FTX’s claim to prioritize withdrawals for Bahamian customers

The Securities and Exchange Commission of The Bahamas (SCB) has denied instructing or allowing cryptocurrency exchange FTX to prioritize withdrawals for Bahamian clients.

In a statement issued on November 12, the SEC strongly denied the contents of November 11 statement From FTX on Twitter that indicated that it had been instructed by “Bahamian HQ Regulations and Regulators” to facilitate the withdrawal of Bahamian funds.

“The Commission would like to be informed that it has not directed, authorized or proposed FTX Digital Markets, Ltd. to prioritize withdrawals for Bahamian clients,” read Statement shared on the SNB’s Twitter page.

Since FTX temporarily suspended withdrawals on November 9, crypto exchange clients have been too Trying to find a way to quit Their money locked in, as much of the business goes through the Bahamas.

The strategies ranged from buying non-fungible tokens (NFTs) on accounts in the Bahamas to offering bonuses to FTX employees for changing their country of residence to the Bahamas.

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However, the SCB warned that any withdrawal of funds could be recovered as part of the company’s potential liquidation proceedings.

The Commission further noted that such transactions could be characterized as void preferences under the insolvency regime and thus result in refunds from Bahamian clients, adding:

“In any event, the Commission does not condone preferential treatment of any investor or client of FTX Digital Markets Ltd. or otherwise.”

The latest statement from the SCB comes just days after the securities regulator froze FTX assets on November 10 and suspended FTX registration in the country.

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The SCB also stripped the powers of FTX managers and said it had decided the “prudent course of action” was to put FTX in liquidation to “preserve assets and stabilize the company.”

According to the statement, the Supreme Court of The Bahamas has appointed a provisional liquidator and said: “FDM assets, client assets, or trust assets held by FDM cannot be transferred, assigned, or otherwise dealt with, without the written consent of the temporary liquidator.”

Cointelegraph contacted FTX for comment but did not receive an immediate response.