Bahamas government requires FTX bankruptcy case to be heard under its jurisdiction

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Bahamas Securities CommissionIslands (SCB) transferred all assets of the bankrupt FTX to a state-controlled wallet, thereby completely ignoring the bankruptcy procedure of the FTX cryptocurrency exchange launched in the United States.

The Government of the Bahamas has publishedofficial document announcing the government takeover of the parent company of FTX Digital Markets and requesting that FTX's bankruptcy case be transferred to court in the Bahamas.

"SCB does not recognize that FTX DigitalMarkets is a party to bankruptcy proceedings under US law and is taking control of the situation. In the coming weeks, the Commission will engage with other regulators and authorities in multiple jurisdictions to address issues affecting lenders, customers and other stakeholders,” the securities commission announced.

Securities Commission of The Bahamas Assumes Control of Assets of FTX Digital Markets Ltd. pic.twitter.com/IzW4PGZSJm

— Securities Commission of The Bahamas (@SCBgov_bs) November 18, 2022

Earlier it became known that SCB secured indecision of the Supreme Court of the Commonwealth of the Bahamas to appoint lawyer Brian Simms to oversee the liquidation of FTX. In accordance with his authority, Simms filed a petition with the American authorities.

Procedure launched in the Bahamas protects FTXfrom asset forfeiture in the United States and provides for the transfer of control over the bankruptcy process to local courts on the islands. During the hearing, Simms stated under oath that the Supreme Court of the Commonwealth of the Bahamas had exclusive jurisdiction over both FTX Digital and its subsidiaries.

Last week SCB denied
information from the FTX crypto exchange that itinterferes in any way with the affairs of the new administration of the company or demands that priority withdrawal of assets of clients registered in the Bahamas be ensured. The island government's move therefore came as a complete surprise and intensified the dispute over control of the FTX insolvency proceedings. Lawyers for FTX have sought legal redress in a claim that the Bahamian government is undermining the exchange's bankruptcy case, filed last week in a court in Delaware, US.