The Securities and Exchange Commission of the Bahamas stated through Twitter and a press release on the 17th that the authorities have the right to control all assets of FTX’s Bahamian-registered company “FTX Digital Markets Ltd” in accordance with existing laws, and ordered FTX to transfer all assets held in cryptocurrency wallets on Saturday. The assets were transferred to government-controlled wallets, saying the emergency legal action was to protect the interests of the company’s customers and creditors.
Securities Commission of The Bahamas Assumes Control of Assets of FTX Digital Markets Ltd. pic.twitter.com/IzW4PGZSJm
— Securities Commission of The Bahamas (@SCBgov_bs) November 18, 2022
It is not clear why the Bahamas Securities and Exchange Commission issued the above-mentioned order five days later. It is also unclear whether and when the asset transfer has occurred.
FTX first filed for Chapter 11 bankruptcy protection in the U.S. District of Delaware on November 11. At that time, FTX, FTX US, Alameda Research Ltd and about 130 other affiliates were included in the bankruptcy filing, but the Bahamas-based “FTX Digital Markets Ltd” had not filed for bankruptcy at the time, and then on the 16th, “FTX Digital Markets Ltd” had applied for bankruptcy protection to the Southern District Court of New York under Chapter 15 of the Bankruptcy Law.
At present, relevant people speculate that it may show that the United States and the Bahamas are in a jurisdictional battle, because FTX is registered in the Bahamas, but filed for bankruptcy in the United States. “The Commission is unable to understand why FTX Digital Markets Ltd is part of the Chapter 11 proceedings,” the Bahamas SEC said.
Bahamian court-appointed joint provisional liquidators filed a document acknowledging foreign bankruptcy as part of an effort to undermine FTX Group’s U.S. filing, prosecutors against FTX said in a filing today. “The filing of Chapter 15 bankruptcy in the U.S. District Court for the Southern District of New York without prior notice was a clear attempt to avoid the oversight of this court and to insulate FTX Digital Markets Ltd from remaining debtors and the government,” prosecutors said. ”
The release notes that the Bahamas SEC will continue to engage with other regulatory authorities and governments in various jurisdictions in the coming days.