1 year ago
88 FTX’s U.S.-based bankruptcy team has said that they will coordinate with liquidators winding down the crypto exchange’s operations in the Bahamas, resolving a dispute that appeared to threaten the recovery of what might be billions of dollars in lost funds.
In a joint statement on January 6, the two sides stated that they will work to share all information, secure property, and coordinate litigation against third parties. FTX’s US bankruptcy team has been at odds with Bahamian officials since November when competing bankruptcies were filed in the two nations.
The Securities Commission of the Bahamas started liquidation proceedings on November 10 against FTX Digital Markets Ltd., the firm’s Bahamas-based unit. The next day a US Chapter 11 proceeding was filed in Delaware, which included over 100 FTX entities including FTX Trading and crypto hedge fund Alameda Research.
Bahamian regulators have seized FTX assets, which officials stated was meant to safeguard assets that will eventually get returned to creditors of FTX Digital Markets.
John Ray took control of FTX after founder and former CEO Sam Bankman-Fried resigned in November, had Accused Bahamas-based liquidators of colluding with the disgraced founder to undermine the US bankruptcy case and shift their assets to the Bahamas.
Ray’s attorneys had refused the liquidators’ demand for access to internal systems and Slack and email accounts, saying they “did not trust” the Bahamians with information that might be used to siphon assets away from the United States bankruptcy team.
Bahamian securities regulators accused Ray of displaying “a cavalier attitude towards the truth” in his statements about the Bahamian asset seizures.
The US team has also disputed the size of the Bahamian assets that were seized, stating that they were worth $296 million in November, not $3.5 billion as the liquidators estimated. Friday’s statement highlighted the US team was now comfortable that the assets were properly safeguarded.
Ray said that there were still some issues to get worked out in the agreement with the liquidators from the Bahamas. Friday’s statement explained that the details of the agreement would get filed ‘shortly’ with the United States Bankruptcy Court in Delaware.
Ray, one of the liquidators, and attorneys for the liquidators have not responded to a request for comment.
Sam Bankman-Fried was arrested on fraud charges and pleaded not guilty on January 3. Ray has said that the crypto exchange lost $8 billion of customer money, and added the bankruptcy team is mainly focused on recovering assets to help repay creditors.
