Users of FTX who were caught up in the shocking collapse of the cryptocurrency exchange might finally hear some good news from the Bahamas.
The Bahamas’ Securities Commission (SCB) announced on Thursday that it has successfully preserved $3.5 billion in cryptocurrency linked to its local affiliate, FTX Digital Markets (FTXDM), the organization behind Sam Bankman-Fried’s international platform.
The Commission stated that it perceived dangers to the platform’s surviving digital assets after FTX was subject to cyberattacks before declaring bankruptcy in November. With the aid of infrastructure start-up Fireblocks, it was able to get a court order to protect the cryptocurrency.
At the time of the transfer on November 12, market prices were used to determine the worth of the remaining assets. Since then, the cryptocurrency markets have remained largely stable.
The assets will be kept by the Commission until the Supreme Court instructs it to distribute them to creditors. Although its legal authority to do so is still in question, it has now asked for permission to disclose information about the assets in FTX’s US-based bankruptcy proceedings.
The Bahamas’ Securities Commission (SCB) said it will:
“continue to conduct a comprehensive and diligent investigation into the causes of FTX’s failure, act in accordance with directions issued by the Supreme Court of The Bahamas, collaborate with other supervisory authorities, and take such further actions as needed to preserve the assets of FTXDM and to safeguard the interests of customers and creditors of FTXDM.”
Per reports, the Department of Justice is investigating the hacking event that resulted in the unauthorized withdrawal of approximately $500 million in cryptocurrency from FTX’s functioning hot wallets.
According to lawyers, the top 50 FTX companies owe between 100,000 and one million debtors’ money, totaling $3.1 billion. FTX claims that Bankman-Fried stole billions of dollars worth of cryptocurrency and transferred it to the trading unit Alameda Research, which ultimately lost the money by employing dangerous market tactics.
Last week, Bankman-Fried was extradited from The Bahamas to the US, where he will now be prosecuted on an enormous eight-count indictment that includes fraud and conspiracy allegations. Gary Wang, the chief technical officer of Alameda Research, and Caroline Ellison, the company’s CEO, have already entered guilty pleas to related crimes.
While he waits for his trial, Bankman-Fried is currently under house arrest at his parent’s house in California. A $250 million bond backed by the mansion was signed, and a US Magistrate Court granted him bail.
