Bahamas regulator responds to FTX allegations

The Securities Commission of The Bahamas (SCB) rejected FTX’s allegations of unauthorized access to assets of the exchange’s Bahamian subsidiary.

Securities Commission of The Bahamas Statement on Transfer Motion In FTX Digital Markets Chapter 15 Proceedings. https://t.co/CB5f7w1wGT pic.twitter.com/ZMqrbU6vhf

— Securities Commission of The Bahamas (@SCBgov_bs) November 24, 2022

On November 11, FTX Trading, Alameda Research and more than 130 affiliated entities filed for bankruptcy in Delaware under Chapter 11 of the U.S. Bankruptcy Code.

On the same day SCB froze the assets of the Bahamas-registered subsidiary of the group — FTX Digital Markets (FDM). On November 15 the jurisdiction’s Supreme Court appointed temporary liquidators for the unit.

FDM immediately filed for creditor protection in New York. The step was taken to avoid seizure of the company’s assets in the United States.

FTX Trading accused the Bahamian regulator of unauthorized access to the exchange’s assets. A company spokesperson also noted that there were “cryptic comments from authorities regarding actions concerning certain assets.”

SCB measures to move funds were undertaken ‘in the interests of FDM’s clients and creditors’.

«К сожалению, в ходатайстве новый CEO FTX Trading исказил своевременность принятых мер непоследовательными и неточными утверждениями. Это относится и к тому, что должники предпочли полагаться на заявления лиц, которых сами характеризовали как unreliable and compromised sources информации», — говорится в заявлении Комиссии.

The regulator stressed that the aforementioned statement by the current head of the company John Ray, and the exchange management’s reports of a hack, only confirmed the correctness of the asset-protection actions taken.

Against this backdrop, FTX filed a motion to transfer all remaining assets totaling about $740 million to custody with BitGo. On November 16 the companies signed the corresponding agreement, The Block reports.

FTX will make an upfront payment of $5 million, with monthly service fees estimated at $100,000.

«The time has come to take a serious approach to ending anthropogenic catastrophes in the crypto industry. While you are destroying FTX’s subsidiary companies, those who used BitGo’s products remain solvent and safe,” said BitGo’s CEO Mike Belshe.

In a note to staff, founder and former CEO Sam Bankman-Fried explained the causes of the collapse and did not rule out the possibility of restoring the platform’s operations.

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