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The Bahamas Authorities Holding FTX Crypto Worth $3.5 Billion!

Following a series of cyberattacks on FTX that led up to the company's declaration of bankruptcy in November, the Commission stated that it perceived dangers to the remaining digital assets held by the platform.

Photo by Markus Winkler / Unsplash

Users of FTX caught up in the catastrophic collapse of the crypto currency exchange may at long last receive some encouraging news courtesy of The Bahamas.

The Bahamas Securities Commission of The Bahamas said on Thursday that it successfully secured $3.5 billion in crypto currency linked to a local subsidiary of FTX Digital Markets (FTXDM). FTXDM is the company that is behind Sam Bankman-main Fried's worldwide platform.

Step Taken to Protect the Crypto of FTX

Following a series of cyber attacks on FTX that led up to the company's declaration of bankruptcy in November, the Commission stated (1) that it perceived dangers to the remaining digital assets held by the platform. With the support of infrastructure company Fireblocks, it successfully got a court injunction to protect the crypto currency.

"In order to promote the protection and security of the assets being held by the Commission for the customers and creditors of FTXDM the above steps were conducted under a sealing order requested by the Commission and granted by the Supreme Court of The Bahamas on 16 November 2022."

The pricing of the remaining assets on the market on the day of the transfer, November 12, was used to determine their value. Since that time, crypto markets have exhibited a degree of consistency.

The Commission will keep the assets in its possession until it receives instructions from the Supreme Court to distribute them to the creditors. It has now made a request for permission to communicate information on the assets with the US-based bankruptcy procedures that FTX is conducting. However, its legal ability to do so is uncertain.

The SCB has stated that it will "continue to conduct a comprehensive and diligent investigation into the causes of FTX's failure, act in compliance with instructions given by the Supreme Court of The Bahamas, work collaboratively with other regulatory authority, and take such further actions as necessary to retain the investments of FTXDM and to protect the customer interests and creditors of FTXDM."

According to reports, the United States Department of Justice is investigating the hacking event, which resulted in the theft of over half a billion dollars worth of crypto currency from FTX's functioning hot wallets.

The Debtors of FTX

According to estimates provided by legal professionals, FTX companies owe money between 100,000 and one million debtors, with the top 50 companies being responsible for a deficit of $3.1 billion. Allegedly, Bankman-Fried moved crypto assets worth billions of dollars away from FTX and into the trading unit of Alameda Research. However, Alameda Research ultimately lost the cash due to dangerous market methods.

Last week, Bankman-Fried was deported to the United States from The Bahamas. Once he arrives in the United States, he will be facing a massive eight-count indictment that includes allegations of fraud and conspiracy. Caroline Ellison, the CEO of Alameda Research, and Gary Wang, the Chief Technology Officer, have both previously entered guilty pleas to the charges that they face.

While he is waiting for his trial, Bankman-Fried is being held under house arrest at his parent's residence in California. After posting a bond of $250 million, backed by the house, he was released on bail by a US Magistrate Court.