Yesterday the Bahamas claimed that they were holding $3.5 billion in FTX assets to pay back those who lost money from the now-bankrupt company. FTX says Bahamas is holding much less.
Yesterday it was reported that the Bahamas is holding $3.5 billion in FTX assets.
Bahamian regulators took control of digital assets worth $3.5 billion from FTX’s local subsidiary in early November, a day after the cryptocurrency exchange filed for bankruptcy in the U.S.
The Securities Commission of the Bahamas took the assets from FTX Digital Markets, citing “imminent dissipation” of the funds due to risks against the exchange, including hack attacks, the regulator said Thursday.
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The agency says it will temporarily retain “exclusive control” of the assets, which it’s storing in “secure digital wallets,” until the Bahamas Supreme Court directs it to return them to customers and creditors.
FTX witnessed a flurry of fund movement in the hours after the company filed for Chapter 11 bankruptcy.
Around that time, an unidentified hacker using the moniker “accounts drainer” stole nearly $400 million worth of tokens from the company.
On Nov. 12, FTX acknowledged that an unidentified entity had “unauthorized access to certain assets,” and pledged to “secure all assets, wherever located,” according to a statement published by FTX U.S. General Counsel Ryne Miller, attributed to newly installed CEO John J. Ray III. He was appointed after CEO and founder Sam Bankman-Fried stepped down.
However, later yesterday, FTX came out and said that the Bahamas is holding much less of FTX’s assets – more like $296 million rather than the $3.5 billion.
FTX on Friday disputed claims by the Securities Commission of the Bahamas (SCB) that the regulator was holding $3.5 billion of the bankrupt cryptocurrency exchange’s assets.
When the Commission seized the digital assets of FTX in November, they were worth just $296 million, FTX said in a statement. FTX urged the commission to “clear up any confusion” about the assets it holds and their value.
The regulator began liquidation proceedings against FTX Digital Markets Ltd., the company’s Bahamas-based unit, in November. FTX said it will seek the return of any assets seized, because FTX DM is only a “local service company” which does not own the FTX.com exchange or any of the cryptocurrency seized.
SCB said Thursday it had seized over $3.5 billion in cryptocurrency and was holding those funds for future repayment to FTX’s customers and other creditors.
SCB did not identify the type of cryptocurrency seized or say how it was valued.
FTX said Friday that most of the seized cryptocurrency was in the form of FTX’s proprietary FTT tokens. The seized FTT tokens would have plunged in value to $167 million as of Dec. 20, and the SCB may be unable to find a buyer for such a large stake even at that lowered price, FTX said.
SCB did not immediately respond to a request for comment Friday.
Unfortunately for the Bahamas, the investments of FTX that they are holding are in large part the garbage cryptocurrency created by FTX that was almost worthless.
The SCB hasn’t commented because they are too shocked to speak about their safeguarding assets that are worthless.
As TGP reported earlier, FTX is still trying to determine how much it owes and how much money it has. This is a total trainwreck.