The Bahamas Securities Commission says it has seized $3.5 billion worth of cryptocurrency from the crashed FTX crypto exchange. In a press release last night, the regulator confirmed the total amount taken from FTX’s Bahamian subsidiary, FTX Digital Markets, adding that the funds were transferred to its digital wallets “for safekeeping”. The regulator has previously confirmed that it owns 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 Nov. 12, a day after FTX filed for U.S. bankruptcy protection. 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 customers and creditors, or liquidators. The insolvency estate.
The regulator said it took the funds after receiving information from Sam Bankman-Fried, the founder of FTX, 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 the target of a suspicious hack that caused $477 million to disappear from the company’s crypto wallets. The identity of the operator is not yet known. The Bahamian regulator is under scrutiny for its role in the FTX collapse and subsequent legal proceedings.
The committee wanted to address the insolvency proceedings for FTX in the Bahamas. But FTX’s U.S. lawyers contested the move, claiming 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 Bahamian regulator said the allegations were “inaccurate” and that its decision to transfer the funds was adopted to protect the interests of customers and investors.
Bankman-Fried, 30, the former CEO of FTX, was arrested in the Bahamas and later extradited to the US, where he is awaiting trial on charges of wire fraud, conspiracy to commit money laundering and conspiracy to defraud the US and to violate campaign finance laws. He was released this week Released on $250 million bail and reportedly receiving visitors at his parents’ home in California, Bankman-Fried is expected to be arraigned in Manhattan federal court on January 3.
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