On November 10, the Bahamas Securities Commission (BSC), which is the nation’s regulator for securities, placed a freeze on the assets of FTX Digital Markets (FDM) and “associated parties,” and it also terminated FTX’s registration in the country.
In a public statement, the BSC said that it was aware of “public claims that customers’ money was mishandled, mismanaged, or moved to Alameda Research.”
A “bank-run” on FTX caused a liquidity crisis for the exchange, and Alameda, a trading firm, was founded by FTX CEO Sam Bankman-Fried. A leaked balance sheet from the firm showed that it held large amounts of the FTX exchanges’ native token, FTX Token. Rumors that Alameda was funding trades using FTX user funds led to the “bank run.”
The BSC has now stripped the directors of FTX of their powers and said that it has come to the conclusion that placing FTX into provisional liquidation is the “prudent course of action” in order to “preserve assets and stabilise the firm.”
The Bahamian Supreme Court is said to have appointed a temporary liquidator and released the following statement: “No assets of FDM, client assets, or trust assets held by FDM may be transferred, assigned, or dealt with in any other way without the written consent of the interim liquidator.”
FTX has its headquarters in the Bahamas, and its subsidiary in that country is called FTX Digital Markets. Separate from FTX US is FTX US, which is a business situated in the United States.
According to a statement released by the BSC, the company would collaborate with the appointed liquidator in order to “achieve the best possible conclusion for the consumers and other stakeholders of FTX.” The FTX crisis has also gotten the attention of regulators in the United States. As a direct result of the crisis, Maxine Waters, the chair of the House of Representatives Financial Services Committee, is pushing for more protection for consumers and more federal oversight of cryptocurrency trading platforms.
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