FTX logo with $100 bill crypto coins displayed for illustration. FTX has filed for bankruptcy in the US and is seeking protection in court as it seeks a way to return funds to users.
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Securities regulators in the Bahamas acknowledged that they had ordered the transfer of FTX digital assets from corporate wallets to their own custody, citing authority granted to them by the Bahamas Supreme Court and challenging FTX’s contention that the US Chapter 11 bankruptcy procedures would apply to them.
in one press release On Thursday night, the Securities Commission of the Bahamas (SCB) said it had “exercised its powers as a regulator” and ordered the transfer of “all digital assets” from FTX Digital Markets, a Bahamian subsidiary of the FTX empire.
The value of the property is unknown. However, crypto research firm Elliptic believes the $477 million theft reported this weekend is linked to actions by Bahamian regulators.
Testimonies from both the Bahamas and US attorneys indicate “that the ‘hack’ was in fact the Bahamian government’s seizure of FTX assets,” Elliptic wrote.
The filing backfired on an emergency filing by FTX in a U.S. court that challenged the position of the Bahamian liquidators and asked the Delaware bankruptcy court to step in and enforce an automatic stay, a standard feature of Chapter 11 bankruptcy proceedings.
In that filing, the Bahamian government was accused of seizing FTX assets and taking them into its own custody, an allegation corroborated by SCB’s own statement.
Sam Bankman-Fried, founder and former CEO of FTX and former majority owner of a complex network of FTX-Alameda Research subsidiaries, has been accused by FTX’s lawyers of colluding with Bahamian regulators to extract digital assets from FTX’s custody in to move a Fireblock Asset Depot.
Bankman-Fried was effectively in the custody of the Bahamian government, the FTX filing found.
“It is not the Commission’s understanding that FDM [FTX Digital Markets] is a party to the U.S. Chapter 11 bankruptcy proceedings,” the Bahamian regulator said in a press release.
Bankman-Fried, securities regulators and FTX’s attorneys have not yet responded to requests for comment.
— CNBC’s Mackenzie Sigalos contributed to this report.