Bahamas’ Financial Watchdog Takes Custody Of Over $3.5 Billion FTX User Funds

The Bahamian Securities Commission (BSC) has taken custody of FTX’s deposits as a precautionary measure due to concerns about potential theft or dissipation of the assets. According to a BSC press release, FTX filed for bankruptcy, citing a cyberattack on the exchange and the possible theft of assets from wallets controlled by former employees.

This financial regulator made this move to protect the interests of FTX customers and creditors, as the BSC stated there was a risk of lost or misused assets. In general, it is not uncommon for regulatory bodies to take such measures to protect the interests of investors and maintain the integrity of financial markets.

The Reason Behind BSC’s Move

One of the Commission’s officials stated that the regulator took action due to growing concerns about the “significant risk of possible dissipation” of these assets, as well as to protect the interests of FTX’s customers and creditors.

The official further confirmed that the BSC would hold on to these assets until the Supreme Court of Bahamas directs the Commission to deliver them to the customers and creditors entitled to such assets.

Notably, the BSC’s statement indicates that it did not direct FTX to give precedence to the withdrawals of Bahamas-based clients. The statement also implies that Gary Wang and Sam Bankman-Fried, the co-founders of FTX, no longer have access to the assets in question.

One Bad News After Another

It has been one bad news after another for FTX since it declared bankruptcy. Last week, a group claiming to represent FTX users sued all former FTX executives.

They prayed the court not to allow other FTX creditors or creditors of FTX’s sister company, Alameda research, to have access to FTX funds. According to the court document, the group claims that there should be a difference in bankruptcy proceedings for customer class members and other creditors.

Also, scammers are now attempting to scam unsuspecting FTX users. They claim to represent government officials and ask for the users’ login details to their FTX accounts.

They even created a website for that purpose. However, the US Department of State promptly released an official statement warning users that it would never ask for the login details to their FTX accounts.

Related Posts