Fighting $32 billion FTX collapse as Bahamas tries to gain control of bankruptcy case in US courts

Fighting $32 billion FTX collapse as Bahamas tries to gain control of bankruptcy case in US courts
Fighting $32 billion FTX collapse as Bahamas tries to gain control of bankruptcy case in US courts

The disgraced founder of collapsed cryptocurrency firm FTX has been accused of trying to siphon assets from the exchange to the Bahamas.

Bankruptcy attorneys filed an emergency motion Thursday night, alleging Sam Bankman-Fried was trying to “undermine” the court process and was trying to “transfer debtors’ assets to accounts in the Bahamas under the control of the U.S. government.” Bahamian”.

It comes amid a legal battle over bankruptcy jurisdiction, with US and Bahamian officials squabbling over who should oversee the case.

Cryptocurrency exchange FTX, founded by Mr Bankman-Fried, 30, filed for bankruptcy protection in Delaware last week, leaving up to a million creditors out of pocket and a black hole $8 billion in its accounts.

The cryptocurrency firm, which lacked a $40 million penthouse in the Bahamas, went bankrupt after executives secretly used billions in customer deposits to fund risky trades at a crypto hedge fund. Earlier this year, it was valued at $32 billion.

The bankruptcy case in the United States is being handled by John Jay Ray, a restructuring veteran who oversaw the breakup of collapsed energy giant Enron.

However, on Wednesday, FTX’s Bahamas unit filed a separate bankruptcy petition on behalf of the country’s regulators in another court. The filing called on the United States to recognize the liquidation proceedings on the Caribbean island.

The Bahamas Securities Commission said Thursday that it used powers granted by its Supreme Court to “transfer all assets” of FTX’s Bahamas division to its own custody for “custody.”

In response, lawyers working with Mr Ray accused the Bahamas of obtaining “unauthorized access” to the company’s systems “for the purpose of obtaining digital assets”.

Hundreds of millions of dollars in FTX cryptocurrency tokens have been moved out of the company following its US bankruptcy filings.

FTX lawyers claimed that on November 13, two days after the US bankruptcy filing, “certain post-petition transfers” were made by Mr. Bankman-Fried of his assets to accounts controlled by US authorities. Bahamas. The lawyers added that Mr Bankman-Fried appeared at the time to be “effectively in the custody of Bahamian authorities”.

FTX is facing multiple regulatory investigations from dozens of authorities in the United States as well as inquiries from regulators and police in the Bahamas.

FTX lawyers have accused the company’s founder of “incessantly and disruptive tweeting” since the company went bankrupt.

In private messages leaked earlier this week, Mr Bankman-Fried, known as SBF, told a reporter he would seek to “win a court battle against Delaware” over the case. He is still trying to raise as much as $8 billion to bail out the exchange, despite stepping down as chief executive last week.

Mr. Ray, who is now chief executive of FTX, said on Wednesday: “Mr. Bankman-Fried has no permanent role at FTX, FTX US or Alameda Research Ltd and does not speak on their behalf.

Legal documents filed in the case show Mr Bankman-Fried also took out a personal loan worth $1 billion from Alameda, his cryptocurrency hedge fund which received accounts receivable funding FTX. He did not respond to a request for comment.

. fight against the collapse billion dollars FTX so the Bahamas try take control the case bankruptcy before the courts us

. Fighting billion FTX collapse Bahamas gain control bankruptcy case courts

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