Bahamas Regulator Seizes FTX’s Cryptos to Protect Creditors and Clients

The Bahamas Securities Commission has directed cryptocurrency exchange FTX to send its digital tokens to a crypto wallet that the regulator controls. The watchdog added that the urgent regulatory move was essential to safeguard the interests of FTX customers and creditors.

Bahamas Regulator Seizes FTX’s Cryptos for ‘Safekeeping’

The SCB (Securities Commission of Bahamas) revealed that it ordered the transfer of crypto assets of FDM (FTX Digital Markets Ltd.) to a wallet that the regulator monitors for safekeeping. Remember, FDM is the Bahamian branch of SBF’s FTX Trading company, which operates and owns the cryptocurrency trading site

The securities watchdog confirmed that the regulator is following an order from the Bahamas Supreme Court, elaborating that the urgent interim action by the regulator was essential to safeguard the interest of FDM’s creditors and clients.

The regulator detailed that the Commission can execute a judicial order to secure customer interest under the DARE Act (Digital Assets & Registered Exchanges Act), 2020.

Also, the announcement added that the upcoming weeks and days would see the Commission engaging with other authorities and regulators in several jurisdictions to analyze factors impacting the clients, stakeholders, and clients of FDM worldwide to get the best potential outcome.

The SCB took the move to freeze FTX Digital Markets’ assets and associated parties on 10 November as the woes of one of the leading cryptocurrency exchanges unfolded. Also, the regulator asked the Supreme Court to elect Brian Simms as a liquidator (court-supervised).

Moreover, the court had approved Peter Greaves and Kevin Cambridge of PwC (PricewaterhouseCoopers) as provisional liquidators. Meanwhile, the Commission didn’t immediately comment when asked for a response, nor did FTX’s spokesperson. FTX exchange filed for insolvency over the previous week in Delaware.

That came amidst one of the high-profile cryptocurrency blow-ups. Meanwhile, the event escalated as investors rushed to cash out $6 billion within three days, and competitor exchange Binance halted the suggested rescue deal.

Bahamas securities watchdogs had suspended FTX Digital’s certificate and kick-started involuntary liquidation proceedings before the United States insolvency case began. Meanwhile, individuals appointed to monitor the actions have questioned the legitimacy of the United States proceedings.

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