FTX’s digital belongings seized in The Bahamas for ‘safekeeping’ | Crypto

Securities Fee of The Bahamas says it has taken management of FTX Digital Markets’ belongings to guard traders.

The Bahamas unit of troubled cryptocurrency trade FTX has had its digital belongings seized by monetary authorities within the Caribbean nation.

The Securities Fee of The Bahamas mentioned on Thursday it had transferred the digital belongings of FTX Digital Markets (FDM) to a digital pockets beneath its management for “safekeeping”.

The regulator mentioned it had taken the motion on Saturday to guard the pursuits of shoppers and traders.

“Pressing interim regulatory motion was vital to guard the pursuits of shoppers and collectors of FDM,” the fee mentioned in an announcement.

“Below the Digital Belongings and Registered Exchanges Act, 2020 (“DARE Act”), the Fee has the authority to use for a judicial order to guard the pursuits of shoppers or clients of a registrant of the Fee beneath the DARE Act.”

The regulator mentioned it was its understanding that FDM is just not a celebration to chapter proceedings in the US involving dad or mum firm FTX.

“Over the approaching days and weeks, the Fee will have interaction with different regulators and authorities, in a number of jurisdictions, to deal with issues affecting the collectors, shoppers and stakeholders of FDM globally to acquire the absolute best end result,” it mentioned.

The announcement comes after a US courtroom submitting on Tuesday confirmed that FDM was in search of safety beneath Chapter 15 of the US Chapter Code.

Non-US firms use the supply to guard themselves from collectors in search of to file lawsuits or tie up belongings within the US.

FTX filed for chapter final week after traders rushed to withdraw $6bn from the platform and a proposed rescue deal by its rival Binance fell by way of.

The collapse of FTX, the third-largest crypto trade, has despatched shockwaves by way of the crypto sector, prompting allegations of fraud and comparisons to the collapse of Lehman Brothers.

In a courtroom submitting on Thursday, new FTX CEO John Ray mentioned he had by no means seen such a “full failure of company controls and such an entire absence of reliable monetary info as occurred right here”.

Former CEO and founder Sam Bankman-Fried, who stepped down final week, mentioned in an interview with Vox this week he regretted his determination to file for chapter safety and that regulators “don’t defend clients in any respect”,  earlier than showing to stroll again a few of his feedback.

Bankman-Fried and several other celebrities who promoted FTX are dealing with an $11bn class motion lawsuit from traders, whereas the US Division of Justice and the Securities and Trade Fee are investigating whether or not Bankman-Fried or his firm violated securities regulation.