FTX Bahamas unit seeks Chapter 15 bankruptcy protection in the United States
FTX Digital Markets (FDM), the Bahamas-based subsidiary of FTX, filed in the Southern District of New York a petition under Chapter 15 of the U.S. Bankruptcy Code. Bloomberg reports.
Under the law, such a step eases the handling of cross-border insolvency matters involving assets and entities located in more than one jurisdiction.
Chapter 15 could shield FDM from asset seizures on U.S. soil during liquidation in the Bahamas.
Recognition of the foreign proceeding by a U.S. court will stay lawsuits against the company, CoinDesk reports. Other parties have three weeks to object.
On November 11, the parent company FTX, Alameda Research, and about 130 affiliated firms filed for bankruptcy.
On the same day, the Securities Commission of the Bahamas blocked the assets of FTX Digital Markets and other entities linked to the company, and suspended its license.
The operator of the bitcoin exchange has more than a million creditors, according to court filings. Bloomberg deemed client recoveries unlikely.
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