Bahamas Seizes Digital Assets Worth Over $3.5 Billion From Collapse of Crypto Exchange FTX

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The Bahamas Securities Commission has revealed that it seized digital assets worth over $3.5 billion from the collapse of crypto exchange FTX. The regulator explained that the cryptocurrencies were transferred to its wallets “for safekeeping” and “are held by the Commission on a temporary basis.”

Bahamian Regulator Seizes Cryptocurrencies From FTX

The Bahamas Securities Commission (SCB) said on Thursday that it had obtained a court order to transfer digital assets held by, or in the custody or control of, FTX Digital Markets Ltd. (FTXDM) to its secure wallets. FTX Digital Markets is the Bahamian subsidiary of FTX Trading Ltd. of Sam Bankman-Fried, who owned and operated the FTX.com crypto-trading platform.

The regulator wrote this on November 12:

The Commission has taken action to order the transfer of all digital assets in the custody or control of FTXDM or its principals, valued at more than US$3.5 billion, based on market prices at the time of transfer, to commission-controlled digital wallets, to keep safe.

The Commission added that it exercises “its regulatory powers acting under the authority of an order made by the Supreme Court of the Bahamas”. The regulator stressed that the process “did not involve the creation of additional tokens.”

Seized cryptocurrencies “are held by the Commission on a temporary basis, until the Supreme Court of the Bahamas orders the Commission to deliver them to customers and creditors who possess them, or to JPLs. [Joint Provisional Liquidators] to be administered in accordance with the rules governing the insolvency estate for the benefit of FTXDM’s customers and creditors,” the regulator said.

The Securities Commission noted that the seizure was made “pursuant to a sealing order requested by the Commission and granted by the Supreme Court of the Bahamas” on November 16. The regulator reiterated that contrary to some media reports:

The Commission in no way directed, authorized or suggested to FTXDM the prioritization of withdrawals for Bahamian customers.

FTX filed for bankruptcy on November 11, and around one million customers and investors lost billions of dollars. The US government and regulators have filed multiple fraud charges against the crypto firm and Bankman-Fried. The former FTX CEO was arrested in the Bahamas and extradited to the United States last week. He is currently at his parents’ home in Palo Alto, Calif., on $250 million bond.

What do you think of the Bahamian regulator seizing FTX’s crypto assets for safekeeping? Let us know in the comments section below.

Kevin Helms

An economics student from Austria, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests include Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.

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