The FTX logo on a laptop screen.
Andrey Rudakov | Bloomberg via Getty Images
The Securities Commission of the Bahamas says it has seized $3.5 billion worth of cryptocurrency from collapsed crypto exchange FTX.
In a media release late Thursday, the regulator confirmed the total taken out of FTX Digital Markets, FTX’s subsidiary in the Bahamas, adding that the funds were moved to their own digital wallets “for safekeeping.”
The regulator previously confirmed that it holds some of FTX’s digital assets, but did not disclose the amount.
The funds were valued at more than $3.5 billion, based on market prices at the time of the transfer, according to the commission. The transfer occurred on 12/11, the day after FTX filed for Chapter 11 bankruptcy protection in the US
The Bahamian Securities Commission said the funds would be held “temporarily” until ordered by the Bahamas Supreme Court to be delivered to customers and creditors or to liquidators of the bankruptcy estate.
The regulator said it took the funds after receiving information from Sam Bankman-Fried, FTX’s disgraced co-founder, about cyberattacks on the systems of FTX’s Bahamian unit.
There is a “significant risk of an imminent liquidation” of the assets under the control of FTX Digital Markets, it said.
After FTX filed for bankruptcy, it became the target of an alleged hack that drained $477 million from the firm’s crypto wallets. The identity of the perpetrator is not yet known.
The Bahamian regulator has come under scrutiny for its role in the FTX collapse and subsequent lawsuits.
The commission wanted to handle bankruptcy proceedings for FTX in the Bahamas. However, FTX’s U.S. attorneys denied the move, claiming the regulator coordinated with Bankman-Fried to transfer FTX’s digital assets into their own custody.
Lawyers for FTX had refused to allow Bahamian court-appointed liquidators access to the company’s computer systems, arguing, “We do not trust the Bahamian government.”
Bankman-Fried, 30, also a former CEO of FTX, was arrested in the Bahamas and then extradited to the United States to await trial on fraud, conspiracy to commit money laundering and conspiracy to defraud the United States and violation of campaign finance laws .
He was released on $250 million bail last week and has reportedly received visitors at his parents’ home in California, including The Big Short writer Michael Lewis.
Bankman-Fried is expected to be charged on January 27, 2020, and will face a plea in federal court in Manhattan. 3.