Categories
Audio Sources - Full Text Articles

FTX customer assets worth more than $3.5 billion have been seized by Bahamian regulators until they can be returned

FTX logo

Photo illustration by Jonathan Raa/NurPhoto via Getty Images)

  • FTX customer assets worth more than $3.5 billion have been seized by Bahamian authorities. 
  • The assets were transferred under their ownership for safekeeping, according to regulators. 
  • Customers and creditors will receive the funds after the Bahamas Supreme Court approves its delivery.   

FTX customer assets worth more than $3.5 billion have been temporarily seized by Bahamian authorities, according to the country’s markets regulator.

The assets were transferred to digital wallets under the control of regulators on November 12, shortly after FTX filed for bankruptcy, per a statement on Thursday from the Securities Commission of the Bahamas.

The move was aimed at safeguarding the assets, the regulator said, after more than $370 million were reportedly stolen from the crypto exchange in an apparent cyber attack after the firm went bust last month.

It also follows reports that up to $2 billion in customer money vanished from the exchange after its founder and former CEO Sam Bankman-Fried quietly transferred large amounts to FTX’s sister company Alameda Research. Those funds would then be used to make risky trades, venture capital investments, and lavish real estate purchases.

“The Commission determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of FTXDM to the prejudice of its customers and creditors,” they said. 

“The digital assets transferred on 12 November 2022 to digital wallets under the exclusive control the Commission are being held by the Commission on a temporary basis, until such time as The Bahamas Supreme Court directs the Commission to deliver them to the customers and creditors who own them,” they added. 

FTX and more than 130 of its affiliates defaulted last month after the cryptocurrency exchange experienced a severe liquidity crunch and subsequent “run on the bank,” resulting in an $8 billion loss of customer money. Once viewed as the white knight of the crypto industry, Bankman-Fried, has since been charged with several counts of fraud and is currently under house arrest at his parents’ property. 

FTX customers whose money is stuck on the failed crypto exchange are now trying to get some of it back. But they are reportedly taking losses by selling their bankruptcy claims at steep discounts. They’ve also filed a class-action lawsuitagainst FTX to recover their funds.

Read the original article on Business Insider