Bahamas Securities Commission Reports Seizing $3.5B in FTX Assets

The Bahamas’ Securities Commission seized $3.5 billion from FTX just after the company’s bankruptcy.

The regulator announced the seizure Thursday (Dec. 29), saying the cryptocurrency funds were moved from FTX Digital Markets (FTXDM) — the company’s subsidiary in the Bahamas — and transferred to the commission’s digital wallets.

“The Commission has consistently taken necessary steps to protect FTXDM customers and creditors as well as the public interest when discharging its duties duly backed by a solid regulatory regime within The Bahamas and international treaties, as well as sound regulatory practices and policies that promote consumer confidence and protections,” the agency said in a news release.

According to the commission, the transfer happened on Nov. 12, one day after FTX filed for bankruptcy protection in U.S. federal court.

The commission said it decided to move the funds after hearing from FTX founder and former CEO Sam Bankman-Fried about cyberattacks on FTXDM.

Based on that conversation, “the Commission determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of FTXDM to the prejudice of its customers and creditors,” the release said.

The commission said it is holding the funds until it receives direction from the Bahamas’ Supreme Court to transfer them to customers and creditors, or to bankruptcy liquidators.

FTX declared bankruptcy last month following a fast-moving collapse that saw a run on its assets. The fallout led to a series of regulatory investigations, which culminated earlier this month in Bankman-Fried’s arrest on charges of fraud and conspiracy.

This week also saw the filing of a class action suit against FTX and its former executives, aiming to represent 1 million FTX customers who want a judge to rule that FTX customers own the digital assets held by FTX and sister firm Alameda Research.

And if a court decides that the assets are FTX property, then the suit is seeking a ruling that the customers should be compensated ahead of other creditors.

“Customer class members should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda,” the complaint said.

As PYMNTS reported last month, FTX has said it owes its 50 biggest creditors upwards of $3 billion. The top 50 claims by the exchange’s creditors range from $21 million on the low end to more than $250 million on the high end.

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