Nov 18, 2022 - Economy

Bahamas regulator moves to secure FTX's crypto

Photo Illustration by Leon Neal/Getty Images

The Securities Commission of the Bahamas announced today that it had moved FTX Digital Markets (FDM) assets to wallets in the control of the government agency.

The big picture: A venue battle over the FTX bankruptcy is underway. A filing yesterday sought to bring proceedings under the Bankruptcy Court for the District of Delaware.

What they're saying: "The Commission has the authority to apply for a judicial order to protect the interests of clients or customers of a registrant of the Commission," the Bahamian regulator said in the letter.

  • It included this cryptic statement: "It is not the understanding of the Commission that FDM is a party to the U.S. Chapter 11 Bankruptcy proceedings."
  • Axios contacted the regulator about the statement. It replied only to note we would receive subsequent statements on the case, without acknowledging the question.

Of note: The value of the assets on FDM is not clear.

What others are saying: "This appears to be part of a turf battle between Bahamian authorities and the U.S. bankruptcy proceedings," Matthew Gold and Dov Kleiner, bankruptcy partners at Kleinberg Kaplan, tell Axios in a statement.

Yes, but: "On its face, there is nothing alarming about this move. If the SEC secured these digital assets — in the wake of an unprecedented collapse, apparent fraud, and looming legal fight — it might be considered prudent by many," Renato Mariotti, partner with Bryan Cave Leighton Paisner, tells Axios via a spokesperson.

  • He noted that authorities in the Bahamas appear willing to cooperate with other nations.
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