The Bahamas Securities and Exchange Commission (BSEC) refuted FTX’s claim that the digital assets it confiscated from the bankrupt exchange were worth $3.5 billion. The regulator commented that there has been “a lack of diligence by the new head of FTX in making public statements about the Commission [to be] disappointing.”
Bahamas FTX and the Regulator Disagree on Value of Seized Crypto Assets
The Bahamas Securities and Exchange Commission issued an announcement Monday to address “material misstatements” made by the new CEO of FTX, John J. Ray III, regarding the worth of the cryptocurrencies confiscated by the FTX. Ray is representing the US FTX creditors in the crypto exchange’s bankruptcy filing (Chapter 11 Debtors).
The Bahamian regulator clarified that on December 30, FTX CEO Ray “publicly challenged the Commission’s calculations” on the amount of crypto assets transferred to their digital wallets on November 12. According to the Commission, FTX had seized over $3.5 billion worth of cryptocurrency. However, Ray argued that the actual value of the digital assets transferred on that date was $296 million.
In their statement on Monday, the Commission claimed that the calculations of the US FTX debtors “were based on incomplete information,” stating:
The Chapter 11 Debtors chose not to take advantage of their right to request information from the joint provisional liquidators, under an injunction from the Supreme Court of The Bahamas… The continued lack of diligence on the part of the US debtors in making public statements about the Commission is disappointing.
The Bahamas regulator declared that FTX’s CEO had made false remarks concerning the subject. The Commission referred to a court filing on December 12, which “without evidence,” and again, under oath on December 13 before the House Financial Services Committee, alleged that the regulator had asked former FTX CEOs Sam Bankman-Fried (SBF) to mint “a substantial number of new tokens” during the crypto exchange’s bankruptcy proceedings.
The Commission added:
Mr. Ray has never once approached the Commission to discuss his concerns with them before he makes them public.
Ray was declared FTX’s new CEO and its head for restructuring when Bankman-Fried resigned when the crypto exchange declared bankruptcy. Ray also led Enron in bankruptcy, an energy giant, in November 2002, saying: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial information as here.”
The Bahamas Securities and Exchange Commission also revealed that FTX’s new CEO had not responded to its December 7 letters, in which the Bahamian regulator offered “cooperation with Chapter 11 debtors.”
Do you think the Bahamas Securities Commission or the new FTX management is correct about the value of seized cryptocurrency? Let us know your thoughts in the comments section.
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