The mysterious shifting of millions of dollars of customers’ funds after the collapse and bankruptcy suit of FTX had sparked suspicion over the safety of leftover assets.
Now, it has been revealed that those digital assets were moved under the orders of regulators in the Bahamas as explained in a new filing by the embattled company. The order was given by the Securities Commission of the Bahamas and it also endorsed the news.
FTX co-founders Sam Bankman-Fried and Gary Wang were on record saying Bahamanian regulators had instructed them to make “certain post-petition transfers” and the assets were “custodied on FireBlocks under the control of the Bahamian government.”
“There is credible evidence that the Bahamian government is responsible for directing unauthorized access to the Debtors’ systems to obtain digital assets of the Debtors—that took place after the commencement of these cases,” said the filing, signed by new FTX CEO John Ray.
Bahamas government responded that it’s Securities Commission of the Bahamas directed the transfer of all digital assets of FTX Digital Markets Ltd. to a digital wallet controlled by the Commission, for safekeeping to protect the interests of clients and creditors under its jurisdiction.
The latest developments have also snowballed into a clash on jurisdiction after US regulators summoned Bankman-Fried to depose before a House Financial Services Committee in December to explain the collapse of FTX.
Reports also said SBF has hired a renowned attorney Martin Flumenbaum known to handle financial fraud-related cases.
Flumenbaum is attached to Paul, Weiss law firm and has represented prominent names facing trouble in the financial world.
His cases include representing Drexel Burnham Lambert managing director Dennis Levine, in the infamous 1986 insider trading case.
