The assets will reportedly be held until a court allows their return to customers and creditors.
The Bahamian Securities Commission (BSC) has said it took control of FTX deposits valued at more than $3.5 billion, shortly after the crypto exchange filed for Chapter 11 bankruptcy protection in November.
According to a media release published late on Thursday by the commission, all digital assets in FTX’s Bahamas unit FTX Digital Markets were seized due to a risk of their “imminent dissipation.”
The report highlighted that shortly after FTX filed for bankruptcy, about $372 million worth of tokens were stolen from the exchange by an unknown actor thought to be an external hacker. FTX then saw nearly $700 million of token outflows within a 24-hour span, according to blockchain research firm Nansen.
The BSC said the digital assets are under its “exclusive control” until the country’s Supreme Court allows the regulator to return them back to the customers and creditors who own them, or to the liquidators.
Meanwhile, former-FTX chief executive Sam Bankman-Fried, who has been accused of orchestrating a years-long scheme to defraud equity investors of nearly $2 billion, was released last week on $250 million bail. He is reportedly at his parents’ house in California, awaiting trial.
Two of the fallen crypto tycoon’s close associates – former FTX chief technology officer Gary Wang and former Alameda Research CEO Caroline Ellison – have pleaded guilty to criminal charges related to the collapse of the cryptocurrency exchange. They are currently cooperating with the Justice Department’s investigation.
According to the US Securities and Exchange Commission (SEC), Bankman-Fried diverted billions of dollars of customer funds to help grow his other entities. The SEC has also charged that as late as last month, he was continuing to mislead investors while trying to fill a multi-billion-dollar hole in FTX’s balance sheet. That conduct stopped only when FTX and Alameda filed for bankruptcy protection on November 11, the regulator has charged.
THAT should help pay for the hurricane damage from 4 years ago..!