2 - 4 minute read
FTX Trading and its affiliated debtors have announced plans to seek the return of cryptocurrency currently held by the Securities Commission of the Bahamas, stating that the funds should be returned to their chapter 11 estates for the benefit of creditors. The Bahamas security commission revealed on Thursday that it had been holding onto more than $3.5 billion worth of FTX customer assets since November 12th. However, the FTX Debtors claim that the funds were transferred to the regulator by former FTX CEO Sam Bankman-Friend and former CTO Gary Wang at the request of Bahamas authorities, after bankruptcy proceedings had already begun.
The value of the cryptocurrency, which is stored in a Fireblocks wallet controlled by the Bahamas regulator, was reportedly worth $296 million at spot market prices when it was initially transferred, and is currently worth approximately $167 million. The FTX Debtors have urged the Bahamas Commission to provide accurate information about the seized cryptocurrency and how it was valued, stating that “there can be no assurances such a large amount of FTT could be sold at spot prices, or at all.” FTT is the native token of FTX.
The FTX Debtors have also alleged that neither Bankman-Friend, Wang, nor the Bahamas Commission had the right to take the cryptocurrency belonging to the FTX Debtors. “The FTX Debtors have informed the Bahamas Commission that none of Mr. Bankman-Fried, Mr. Wang or the Bahamas Commission had a right to take cryptocurrency of the FTX Debtors,” the group said in a statement.
It is unclear at this time how the dispute between the FTX Debtors and the Bahamas regulator will be resolved, but the situation highlights the ongoing legal and regulatory issues surrounding cryptocurrency and the importance of ensuring the proper handling of digital assets. The crypto industry has faced criticism in the past for its lack of transparency and regulation, and this latest development serves as a reminder of the need for clear rules and oversight to protect investors and maintain the integrity of the market.