Over $3,500,000,000 in Crypto Transferred to the Bahamas’ Regulator Hours After FTX Declared Bankruptcy

Over $3.5 billion worth of digital assets were transferred to the Securities Commission of The Bahamas just hours after crypto exchange FTX filed for bankruptcy.

According to a new press release, the Bahamian regulator forced FTX to transfer all of the crypto assets under its control to wallets owned by the government for “safekeeping” on November 12th, the day after FTX filed for insolvency.

“On 12 November 2022, the Commission, in the exercise of its powers as regulator acting under the authority of an Order made by the Supreme Court of The Bahamas, took the action of directing the transfer of all digital assets under the custody or control of FTXDM or its principals, valued at more than US$3.5 billion, based on market pricing at the time of transfer, to digital wallets controlled by the Commission, for safekeeping.”

The Securities Commission says they are only temporarily holding the crypto assets and plan on eventually returning them to their rightful owners, whether they were FTX customers or creditors.

“The digital assets transferred on 12 November 2022 to digital wallets under the exclusive control of the Commission are being held by the Commission on a temporary basis, until such time as The Bahamas Supreme Court directs the Commission to deliver them to the customers and creditors who own them, or to the JPLs [Joint Provisional Liquidations] to be administered under rules governing the insolvency estate for the benefit of the customers and creditors of FTXDM.”

FTX initially filed for bankruptcy on November 11 after halting customer withdrawals. Its founder and former CEO Sam Bankman-Fried is accused of mishandling billions of dollars worth of customer funds and defrauding investors. He is currently out on bail awaiting trial.

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