According to a statement on Dec. 29, Bahamian authorities acquired ownership of digital assets at FTX Digital Markets valued at $3.5 billion immediately after the company sought Chapter 11 bankruptcy protection. This decision was made based on information supplied by founder Sam Bankman-Fried.
The digital assets of FTX, worth more than $3.5 billion as of Nov. 12, were seized by the Bahamian Securities Commission, which cited the danger of “imminent dissipation” of the assets as a result of worries raised by Bankman-Fried, including cyberattacks against the exchange.
According to bankruptcy documents, nearly $372 million worth of tokens were taken from the exchange just hours after FTX declared bankruptcy on Nov. 11. According to blockchain analysis company Nansen, FTX had token outflows of approximately $700 million over the course of one day.
The Bahamian Securities Commission said that the digital assets are temporarily under its “sole custody” until the nation’s Supreme Court grants the regulator permission to release them to the joint liquidators or to the clients and creditors who possess them.
After its current Chief Executive John J Ray III, who is in charge of the reorganization, issued a warning that the overseas clients would lose more money than their American counterparts, this could provide some FTX clients relief.
Authorities in the Bahamas are looking closely at the network of connections between the trading company Alameda Research and the insolvent FTX exchange, which is also known locally as FTX Digital Markets Ltd.
In addition to the fraud action against Bankman-Fried, the U.S. Department of Justice has opened a criminal investigation into the stolen funds, according to Bloomberg news.
The Bahamian Supreme Court recommended that the Commission legally help in distributing information on FTX’s digital assets to American debtors and their representatives, the regulator continued.