Given the nature of digital assets, and the risks associated with hacking and compromise, the Commission determined that placing FDM into liquidation was not sufficient to protect the customers and creditors of FDM.
It is unfortunate that in Chapter 11 filings, the new CEO of FTX Trading Ltd. misrepresented this timely action through the intemperate and inaccurate allegations lodged in the Transfer Motion. It is also concerning that the Chapter 11 debtors chose to rely on the statements of individuals they have (in other filings) characterized as unreliable sources of information and potentially “seriously compromised.”
The Commission further justified its move by mentioning the crypto exchange was hacked, resulting in the theft of $1 billion in cryptos.
The Securities Commission of The Bahamas stated:
The Commission will continue to investigate the facts and circumstances regarding FTX’s liquidity crisis and any potential violations of Bahamian law and hold any responsible companies and individuals accountable, in cooperation with other regulatory agencies and law enforcement both in The Bahamas and in other affected countries in connection with their own investigations.
The collapse of the crypto exchange developed quickly in the beginning of this month, starting with a liquidity crisis, failed buyout by Binance and the mishandled financial balance of FTX by its former CEO, Sam Bankman-Fried, coming into light.
FTX, its US business arm, its sister company Alameda Research and other affiliates filed for Chapter 11 bankruptcy proceedings in the US. The exchange’s Bahamian arm filed for bankruptcy under chapter 15 in the New York court.
Meanwhile, the Monetary Authority of Singapore recently also released a statement regarding the collapse of crypto exchange FTX, clarifying that FTX is not licensed in Singapore and its local clients have no protection.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.