Bahamas Authority Seizes $3.5bn in Cryptocurrency from FTX


FTX logo displayed on a laptop screen.

Andrey Rudakov | Bloomberg via Getty Images

The Bahamas Securities Exchange Commission has seized cryptocurrency worth $3.5 billion from the failed crypto exchange FTX.

In A press release Thursday Night, the regulator confirmed that the accurate sum from FTX was obtained by its Bahamian subsidiary, FTX Digital Markets. These funds were moved to the company’s digital wallets for “safekeeping.” .

The The regulator had previously stated that some of FTX’s digital assets were its property, but did not specify the exact amount.

The Commission calculated that the transfer was worth $3.5 billion based on the market price at the time of the transfer. This took place on November 12, the day after FTX filed for Chapter 11 bankruptcy protection in the US.

The Bahamas Securities Commission said that the funds are being held “temporarily” until the country obtains a Supreme Court order. They are then to be released to creditors and customers, as well as liquidators of any insolvency estate.

After the regulator received information from FTX’s disgraced founding co-founder Sam Bankman-Fried about cyberattacks on FTX’s systems in the Bahamas.

The regulator said that there was a “significant risk of imminent dissipation” of the assets FTX had control over.

After FTX filed for bankruptcy, it was the target of an alleged attack that took $477 million from crypto wallets. The perpetrator has yet to be identified.

The Bahamian regulator has been scrutinized for its role in the FTX fallout and subsequent legal proceedings. It was necessary to manage insolvency proceedings at FTX in the Bahamas, but FTX’s US lawyers challenged the move, saying that it had coordinated with Bankman-Fried to transfer FTX’s digital assets in its own custody.

FTX’s US lawyers refused to allow Bahamian court-appointed liquidators to access the company’s computers systems. “We don’t trust the Bahamian government.”

Former FTX CEO Bankman-Fried was detained in the Bahamas and later extradited to the US. He is now being tried in the United States for fraud, money laundering, conspiracy to defraud, and violating campaign finance laws.

He was released on bail of $250 million and has been hosting guests at his family’s home in California, including “The Big Short” author Michael Lewis.

Bankman-Fried is expected to be arraigned and plead guilty in a Manhattan federal court on January 3, according to a Reuters report.

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