The Bahamian government entity that seized FTX’s crypto assets has revealed that all of the firm’s assets have been shifted into a government-controlled wallet for “safekeeping.”
FTX, which was run by Sam Bankman-Fried, filed for bankruptcy last week after users pulled their assets out of the company following revelations from a now-canceled takeover bid by Binance that SBF had transferred the company’s assets to Alameda Research.
Alameda Research was run by a member of SBF’s “polycule,” Caroline Ellison, who allegedly used FTX’ users’ assets to make risky investments.
In the days following FTX’s collapse, assets from the firm started to disappear in what was widely reported as a hack. Bahamian authorities stated in a press release that they acted under an order from the Supreme Court of the Bahamas to transfer all of FTX’s digital assets into a secure digital wallet controlled by the Securities Commission, Daily Wire reported.
“Urgent interim regulatory action was necessary to protect the interests of clients and creditors,” the government said.
Lawyers representing FTX’s debtors filed an emergency motion to call for the coordination between American and Bahamian officials to be resolved in bankruptcy proceedings in the District of Delaware.
“Having two bankruptcy courts consider related issues simply makes no sense,” they wrote. “It would result in potentially inconsistent opinions, duplication of efforts, and unnecessary expense.”
FTX’s collapse has resulted in many calling for regulations to be imposed on cryptocurrency.
The company’s newly appointed CEO John Ray III slammed the company for a “complete failure of corporate control,” stating that SBF and his cohorts failed to keep proper company records or even hold meetings.
"Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," Ray said.
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”