Regulators in the Bahamas Are Holding $3.5 Billion in FTX Customer Assets

Concerns over the security of assets in FTX custody prompted the authorities to take control of them.

AccessTimeIconDec 30, 2022 at 6:35 a.m. UTC
Updated May 9, 2023 at 4:05 a.m. UTC

The Securities Commission of the Bahamas has taken custody of FTX deposits valued at more than $3.5 billion as of Nov. 12, according to a media release published late Thursday by the SCB.

Shortly after FTX filed for bankruptcy, about $372 million worth of tokens were stolen from the exchange by an unknown actor thought to be an external hacker. Given media reports of a cyberattack on FTX, and possible looting of FTX-controlled wallets by former employees, the Commission said in its statement it "determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of [FTX] to the prejudice of its customers and creditors."

Assets will be held until the Bahamas Supreme Court directs the Commission to deliver them to the customers and creditors who own them, the statement says.

The Commission said that FTX founders Sam Bankman-Fried and Gary Wang no longer had access to the $3.5 billion in tokens that were transferred.

In the statement, the Commission reiterated that it didn't direct FTX to prioritize the withdrawals of Bahamas-based customers.

FTX, a crypto exchange, filed for Chapter 11 bankruptcy protection in the U.S. on Nov. 11 after it unraveled following a CoinDesk report that revealed Alameda Research, an affiliated trading firm, was largely backed by FTT, tokens that FTX created out of thin air.

UPDATE (Dec. 30, 2022, 16:40 UTC): Corrects name of the Bahamas regulator.


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