Bahamas Securities Regulator Blasts ‘Inaccurate’ Accusations Made by FTX

Linh Nguyen — Thu, 24 Nov 2022 11:06:28 +0000

@ Crypto Insider

The Securities Commission of The Bahamas said FTX misrepresented the regulator’s move to secure the embattled exchange’s assets against hacks in bankruptcy court filings in the U.S.

The Securities Commission of The Bahamas is firing back at collapsed crypto exchange FTX’s accusations that the country had directed unauthorized access to transfer assets off the platform after it filed for bankruptcy protection in the U.S.

In a Wednesday notice, the regulator called the allegations “intemperate and inaccurate,” and said it had sought the order from the country’s Supreme Court to protect the embattled exchange’s digital assets against “the risks associated with hacking and compromise.”

Sam Bankman-Fried’s collapsed crypto enterprise, under new leadership, has kicked off insolvency proceedings in the U.S. Bankruptcy Court for the District of Delaware. Shortly after the company filed for chapter 11 bankruptcy on Nov. 11, court-appointed liquidators in the Bahamas filed another chapter 15 suit for cross-border insolvency proceedings in a New York Court.

FTX, in a consequent court filing, asked the court to allow the chapter 15 filing to be transferred to Delaware so that all proceedings could take place in one venue. In the same filing, FTX accused the Bahamian government of directing unauthorized access to FTX’s systems in order to withdraw assets after the company.

The Securities Commission announced afterwards that it had ordered the contents of FTX’s crypto wallets to be transferred to government-controlled wallets for safekeeping.

On Tuesday, during the first court hearing for the chapter 11 proceedings, FTX’s lawyers said they had reached an agreement with the Bahamian liquidators to transfer their New York case to Delaware. While announcing the agreement, James Bromley, a partner in Sullivan & Cromwell’s Finance and Restructuring Group, said FTX had evidence showing that “there have been movement of assets out of the debtors’ estates to the Bahamas.”

The Commission’s statement comes after the hearing, and said it was “concerning” that FTX “chose to rely on the statements of individuals they have (in other filings) characterized as unreliable sources of information and potentially “seriously compromised.””

Statements made by other FTX officials about the exchange suffering “significant thefts” and that their systems were compromised “reinforces the wisdom of the Commission’s prompt action to secure these digital assets.”

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FTX’s Bahamas Arm Files For Bankruptcy Protection in US

Linh Nguyen — Wed, 16 Nov 2022 10:01:18 +0000

@ Crypto Insider

The move on behalf of FTX.com, based in the Caribbean, is the latest legal move in the crypto exchange’s collapse.

FTX Digital Markets, the Bahamas arm of the now defunct crypto exchange, has filed for Chapter 15 bankruptcy proceedings in the Southern District of New York.

The document, registered late Tuesday night, follows the appointment of insolvency liquidators in the Bahamas earlier that day, and an equivalent case for the exchange’s U.S. arm, FTX.US, which was filed last Friday.

The procedure is intended to allow orderly wind-up of cross-border enterprises so that funds can be returned to creditors as fully as possible – potentially including the site’s many regular users.

The pleadings essentially argue that U.S. courts should recognize the Bahamas legal proceedings, allowing other legal claims by creditors to be paused. Under the U.S. bankruptcy code, other parties have three weeks to object before the court makes its decision.

While the Bahamas arm, FTX.com, was supposedly separate from the U.S. market, lawyers argue there’s a link to the U.S. via a client account which held $15,000 at the Holland and Knight law firm in New York.

“It is unclear whether FTX Digital [Markets] has any property in Delaware,” the filing on behalf of the company said, in a remark likely to raise further questions about the organization’s complex structure.

As the U.S. business wounds up, data from secondary markets suggest that creditors can expect to receive only 8-12 cents on the dollar for their claims on the collapsed company.

FTX has collapsed in a matter of days, following CoinDesk revelations that the line with supposedly separate trading arm Alameda Research was blurred. Chief executive Sam Bankman-Fried resigned on Friday and it is possible the company will face criminal proceedings, an official notice form the Bahamas Securities Commission said Sunday.

The post FTX’s Bahamas Arm Files For Bankruptcy Protection in US appeared first on Crypto Insider.

Bahamas Archives - Crypto Insider

Bahamas Securities Regulator Blasts ‘Inaccurate’ Accusations Made by FTX

The Securities Commission of The Bahamas said FTX misrepresented the regulator’s move to secure the embattled exchange’s assets against hacks in bankruptcy court filings in the U.S.

FTX’s Bahamas Arm Files For Bankruptcy Protection in US

The move on behalf of FTX.com, based in the Caribbean, is the latest legal move in the crypto exchange’s collapse.