Bahamas Liquidators Discover Possibilities Of Fraud From FTX

Still, on the ongoing FTX fiasco, the embattled crypto exchange has got it hot from all corners. On one side is the intensive investigation by the regulators, then legal actions from creditors. A few days after the collapse, the legal actions against the FTX exchange increased. Moreover, the latest update from the bankruptcy filings suggests the firm committed severe offences.

FTX’s Bahamian liquidators submitted some documents to the Southern New York District’s Bankruptcy Court. The documents revealed that Joint Provisional Liquidators’ discovered fraud and mismanagement on the part of the crypto exchange.

Given this development, the filings requested restricted sales of the company’s assets until the court reached a verdict. The court would rule its judgment under Chapter 15 of the United States bankruptcy code, which handles insolvency cases involving many countries.

FTX Faces Multiple Legal Actions

Furthermore, in a Tuesday filing, the provisional liquidator in charge of the FTX bankruptcy proceedings in the Bahamas, Brain Simms, made some arguments. First, brain Simms argued the validity of a Chapter 11 bankruptcy filing by the exchange’s subsidiary FTX Trading and 100 other affiliates in Delaware court.

The lawyer noted that FTX Digital is not part of the Delaware Petition. However, he added that the provisional liquidator has the exclusive right to take action, including filing the Delaware petition.

Simms also said he rejects the validity petitions that place FTX affiliates in bankruptcy as he has not authorized such acts in writing or otherwise. The attorney emphasized that the FTX brand and all the core management personnel operated from the Bahamas.

While he does not seek the dismissal of the bankruptcy proceedings in the US, he requested that the court recognize the Bahamian legal proceedings.

Meanwhile, FTX investors took legal action against Sam Bankman-Fried, former CEO of the now-bankrupt crypto exchange. The lawsuits alleged that some yield-bearing accounts were unregistered securities sold in the United States illegally.

The investors seek damages worth $11 billion from the celebrities that promoted SBF lead crypto exchange, including Tennis Star Naomi Osaka and NFL quarterback Tom Brady.

SBF And FTX Caught Under Regulators’ Radar

The state securities regulators went against many crypto lenders because of unregistered crypto yield products. For example, the Securities and Exchange Commission stopped a similar product on Coinbase in September 2021. The SEC chief, Gary Gensler, also suspected foul play due to the unusually high yields attached to such accounts.

Reports revealed the SEC and CFTC are investigating FTX for the alleged embezzlement of $10 billion worth of customers’ assets to Alameda Research.

FTT price tumbles below $1.50 l FTTUSDT on

Law enforcement officers are contemplating whether to extradite SBF to the United States for questioning. The Bahamian Prime Minister also commented on the SBF Crypto exchange crisis. The minister said that the legal framework in the industry could not prevent the collapse.

Featured image from Pixabay, chart from

Related Posts

Bitcoin ‘millionaire’ wallets drop 80% in year of BTC price bear market

Twelve months after Bitcoin’s last all-time high, seven-figure BTC balances have taken a hit. Bitcoin (BTC) millionaires are becoming an increasingly rare breed as numbers fall 80%…

Despite 2 Entities Holding 73% of the FTX Token Supply, FTT Price Still Holds Above $1 per Unit

While a large fraction of crypto assets dropped a great deal in value during the past few weeks and bitcoin is down 18.2% in 30 days, the…

Dogecoin, Solana, XRP Lead Post-Thanksgiving Gains as Bearish Sentiment Wanes

DOGE is up by a double-digit, while XRP has gained by 7% in the last seven days. The overall crypto market valuation is up as tokens recover…

Top 5 Most Expensive BAYC NFTs Ever Sold

The NFT landscape has become a flourishing ecosystem enabling creators to embark remarkable NFTs to marketplaces worldwide. One such creator is Yuga Labs, the brain behind the Bored…

Russia President Putin Calls For Blockchain-based International Payment System

Russian President Vladimir Putin said there is a need for a new and independent international settlement system amidst the sanctions and restrictions placed on his country. President…

Putin calls for blockchain-based international payment system

The Russian President criticized Western’s sanctions and urged for a system “independent of external interference”. Russian President Vladimir Putin criticized monopoly in global financial payment systems and…

Generated by Feedzy