FTX assets freezes bahamas securities regulator

FTX: The Bahamas Securities Commission said FTX’s assets could not be moved without the approval of a Supreme Court-appointed liquidator.

The Bahamas Securities Commission (BSC) — the country’s securities regulator — froze the assets of FTX Digital Markets (FDM) and “related parties” on Nov. 10 and suspended FTX’s registration in the country.

In a statement the BSC said it was aware of “public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research.”

Alameda is a trading firm founded by FTX CEO Sam Bankman-Fried, a leaked balance sheet from the firm showed it held large amounts of the FTX exchanges’ native token, FTX Token FTT$2.84, and rumors it was funding trades using FTX user funds led to a “bank-run” on FTX causing a liquidity crisis for the exchange.

The BSC has now stripped powers from the directors of FTX and said it determined the “prudent course of action” was to put FTX into a provisional liquidation “to preserve assets and stabilize the company.”

According to the statement, the Bahamian Supreme Court appointed a provisional liquidator and said “no assets of FDM, client assets, or trust assets held by FDM can be transferred, assigned, or otherwise dealt with, without the written approval of the provisional liquidator.”

FTX is headquartered in the Bahamas and FTX Digital Markets is the Bahamian subsidiary of the exchange with FTX US a separate, United States-based entity.

The BSC said it will work with the appointed liquidator to “obtain the best possible outcome for the customers and other stakeholders of FTX.”

FTX and the BSC for comment but did not get an immediate response.

The crisis with FTX has also drawn scrutiny from regulators in the U.S. with the House of Representatives Financial Services Committee chair, Maxine Waters, pushing for greater consumer protection and more federal oversight of cryptocurrency trading platforms.

The White House also said U.S. President Joe Biden was aware of the crypto market situation with White House Press Secretary Karine Jean-Pierre alluding to FTX’s liquidity crisis that highlighted “why prudent regulation of cryptocurrencies is indeed needed.”  Crypto Swiss Hub.

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