Bahamas regulator moves to seize FTX cryptocurrencies to ‘protect’ customers and creditors

The Bahamas Securities Commission has ordered crypto-currency exchange FTX to transfer its crypto-currencies into a wallet controlled by the regulator. This “urgent interim regulatory action was necessary to protect the interests“of FTX’s customers and creditors,” the regulator said.

Bahamas regulator takes steps to seize FTX’s crypto-currencies to “secure“.

The Bahamas Securities Commission (BSC) announced Thursday that it had taken “the action of ordering the transfer of all FTX Digital Markets Ltd.’s (FDM) digital assets to a digital portfolio controlled by the Commission, for safekeeping“. FTX Digital Markets is the Bahamian subsidiary of Sam Bankman-Fried’s FTX Trading Ltd, which owns and operates the crypto-currency trading platform FTX.com.

The securities regulator noted that the agency “is acting under the authority of an order of the Supreme Court of The Bahamas“, elaborating:

Urgent interim regulatory action was necessary to protect the interests of FDM’s customers and creditors.

The regulator went on to detail:”Under the Digital Assets and Registered Exchanges Act of 2020 (DARE Act), the Commission has the authority to seek a court order to protect the interests of customers or clients of a person registered with the Commission under the DARE Act.“

The ad continues:

In the days and weeks ahead, the Commission will engage with other regulators and authorities, in multiple jurisdictions, to address issues affecting FDM’s creditors, customers, and stakeholders around the world to achieve the best possible outcome.

The Bahamas Securities Commission took action to freeze the assets of FTX Digital Markets and related parties on Nov. 10 as the crypto-currency exchange’s problems developed.

The regulator also asked the Supreme Court to appoint Brian Simms as a court-supervised interim liquidator. In addition, Kevin Cambridge and Peter Greaves of Pricewaterhousecoopers (PwC) were approved by the court as joint provisional liquidators.