The Securities Commission of the Bahamas said it ordered FTX to transfer all digital assets to a government-controlled wallet for safekeeping.
In the exercise of its powers as regulator acting under the authority of an Order made by the Supreme Court of The Bahamas, the Securities Commission of The Bahamas (‘the Commission’) directed the transfer of all digital assets of FTX Digital Markets Ltd. (‘FDM’) to a digital wallet controlled by the Commission, for safekeeping,” the regulator stated in a press release.
“Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM.”
The Commission did not explain why it made the order public after only five days, nor did it disclose any information on the transfer.
Another notice made last Saturday by the Bahaman authority stated that it did not order FTX to restore withdrawals for inhabitants of the islands, contradicting previous claims made by the defunct crypto exchange.
Jurisdictional conflict?
FTX Digital Markets Ltd, doing business as FTX.com, was based in The Bahamas. On November 11, the worldwide cryptocurrency exchange, its US subsidiary, Alameda Research, and over 130 additional affiliates filed for bankruptcy in the United States. Interestingly, the Bahamas-based exchange business filed for Chapter 15 bankruptcy in a New York district court, whilst the other entities filed for Chapter 11 bankruptcy in Delaware.
The recent announcement by the Bahamas financial market watchdog implies a tug-of-war between authorities in the United States and the Bahamas over jurisdictional claims regarding the defunct cryptocurrency exchange, FTX.
Meanwhile, the defunct cryptocurrency exchange was hacked over the weekend, transferring over a billion dollars in cryptocurrency to hacker-controlled accounts.
FTX developed quickly before collapsing into rubble. In its most recent investment round, the exchange was valued at $34 billion, receiving cash from major venture capital firms. Temasek, Sequoia Capital, and Soft Bank’s Vision Fund all wiped off hundreds of millions of dollars invested in the defunct cryptocurrency exchange.
