Sam Bankman Fried (Shutterstock photo, YouTube/David Rubenstein)
The Bahamas Securities Commission said it seized $3.5 billion worth of cryptocurrencies from the crashed FTX exchange.
In a media release late Thursday, the watchdog confirmed the total amount taken from subsidiary FTX Digital Markets, adding that the funds were transferred to its digital wallets “for safekeeping.” The regulator previously confirmed it holds some of FTX’s digital assets but did not specify the amount.
The funds were valued at more than $3.5 billion, based on market pricing at the time of the transfer, according to the commission. The transfer was made on November 12, a day after FTX filed for bankruptcy protection in the US.
The Bahamas Securities and Exchange Commission said the funds are being held “on a temporary basis” until ordered by the Supreme Court to be released to clients and creditors, or liquidators of the insolvency estate.
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The regulator said it withdrew the funds after receiving information from Bankman-Fried regarding cyber attacks on the systems of FTX’s Bahamas unit. There was a “significant risk of imminent liquidation” of the assets controlled by FTX Digital Markets, it said.
After FTX filed for bankruptcy, it was targeted by a suspicious hack that drained $477 million from the company’s crypto wallets. The identity of the operator is not yet known. The committee wanted to handle insolvency proceedings for FTX in the Bahamas. But FTX’s U.S. lawyers contested the move, claiming in a Nov. 17 filing that the regulator coordinated with Bankman-Fried to gain “unauthorized access” to FTX’s systems in order to transfer digital assets to its custody. In response, the regulator said the allegations were “inaccurate,” and that His decision to transfer the funds was made to protect the interests of clients and investors.
Recall that Bankman-Fried, 30, the founder and former CEO of FTX, was arrested in the Bahamas and later extradited to the US, where he is awaiting trial on charges of fraud, conspiracy to commit money laundering and conspiracy to defraud.
He was released last week on $250 million bail and reportedly received visits at his parents’ home in California. Bankman-Fried is expected to stand trial in Manhattan federal court on January 3.
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