FTX: Bahamas regulators hold US$296mil, not US$3.5bil of assets

FTX: Bahamas regulators hold US$296mil, not US$3.5bil of assets

NEW YORK: FTX has disputed claims by the Securities Commission of the Bahamas (SCB) that the regulator was holding US$3.5bil (RM15.4bil) of the bankrupt cryptocurrency exchange’s assets.

When the Commission seized the digital assets of FTX in November, they were worth just US$296mil (RM1.3bil), FTX said in a statement. FTX urged the commission to “clear up any confusion” about the assets it holds and their value.

The regulator began liquidation proceedings against FTX Digital Markets Ltd, the company’s Bahamas-based unit, in November.

FTX said it will seek the return of any assets seized, because FTX DM is only a “local service company” which does not own the FTX.com exchange or any of the cryptocurrency seized.

SCB said Thursday it had seized over US$3.5bil (RMRM15.4bil) in cryptocurrency and was holding those funds for future repayment to FTX’s customers and other creditors.

SCB did not identify the type of cryptocurrency seized or say how it was valued.

FTX said last Friday that most of the seized cryptocurrency was in the form of FTX’s proprietary FTT tokens.

The seized FTT tokens would have plunged in value to US$167mil (RM735mil) as of Dec 20, and the SCB may be unable to find a buyer for such a large stake even at that lowered price, FTX said.

SCB did not immediately respond to a request for comment Friday.

FTX has been at odds with Bahamian officials ever since filing for bankruptcy protection on Nov 11.

The Bahamian officials have asked for access to FTX’s records to assist with the liquidation of FTX DM, but FTX’s US bankruptcy team said they do not trust Bahamian officials with that information.

FTX’s founder and former CEO Sam Bankman-Fried was arrested on fraud charges and is expected to arraigned on Jan 3, 2023, before US District Judge Lewis Kaplan in Manhattan federal court.

FTX’s new chief executive John Ray has said that the exchange lost US$8bil (RM35.2bil) of customer money. —Reuters

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