Digital Assets Of FTX Seized In The Bahamas By Officials

Financial officials have seized the digital assets belonging to the Bahamas unit of troubled cryptocurrency exchange FTX, Al Jazeera reported.

On Thursday, Nov. 17, the Bahamas' Securities Commission announced that it has moved FTX Digital Markets' (FDM's) digital assets to a digital wallet under its management for "safekeeping."

“Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM,” the commission said in a statement.

“Under the Digital Assets and Registered Exchanges Act, 2020 (“DARE Act”), the Commission has the authority to apply for a judicial order to protect the interests of clients or customers of a registrant of the Commission under the DARE Act.”

The regulator stated that, to its knowledge, FDM is not a party to parent firm FTX's bankruptcy proceedings taking place in the United States.

“Over the coming days and weeks, the Commission will engage with other regulators and authorities, in multiple jurisdictions, to address matters affecting the creditors, clients, and stakeholders of FDM globally to obtain the best possible outcome,” it said.

The announcement follows this week's US court filing, which revealed that FDM was looking for bankruptcy protection under Chapter 15 of the US Bankruptcy Code.

Companies based outside the US use this clause to shield themselves from creditors who want to sue them or seize their assets in the US.

FTX filed for bankruptcy after investors rushed to withdraw $6bn from the platform and a proposed rescue deal by its rival Binance fell through.

John Ray, the newly appointed CEO of FTX, claimed in a court document on Thursday that he had never witnessed a "complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."

Sam Bankman-Fried, the company's former CEO and founder who resigned last week, appeared to retract some of his remarks in an interview with Vox this week, saying he regretted his choice to seek bankruptcy relief and that regulators "don't protect customers at all."

Investors have filed an $11 billion class action lawsuit against Bankman-Fried and numerous celebrities who promoted FTX, and the US Department of Justice and the Securities and Exchange Commission are looking into whether Bankman-Fried or his business broke the law regarding securities.