• FTX seeks to exclude its Bahamian unit, FTX Digital Markets (FTX DM), from any claim over company assets.
• The company was set up in May 2022 with alleged involvement of fraud by its founder Sam Bankman-Fried.
• There has been legal and diplomatic tensions between US and the Bahamas since the filing claims that Bahamian law enforcement agencies had close relationship to SBF.
FTX Seeks To Exclude Bahamian Unit From Any Claim Over Company Assets
FTX DM was established in May 2022 as an offshore haven for an ongoing fraudulent scheme by its founder, Sam Bankman-Fried (SBF). The company is now seeking to exclude its Bahamian unit from any claim over company assets, according to a legal filing on 19 March. This accusation can likely rekindle legal and diplomatic tensions between the U.S. and the Bahamas.
Bahamas Courts Placed FTX’s Bahamas Arm Into Liquidation
The Bahamas courts placed the FTX’s Bahamas arm, FTX Digital Markets (FTX DM), into liquidation on 10 November 2020. The larger group filed for bankruptcy in Delaware the next day thus creating a perplexing situation which has already resulted in disagreements over who has access to corporate data held centrally.
Close Relationship With Bahamian Agencies Mentioned In Filing
The legal filing also mentions $143 million transferred to FTX DM bank accounts and accuses Bahamian authorities of assisting SBF’s efforts to avoid prosecution. It states that SBF and other FTX executives maintained a close relationship with Bahamian law enforcement agencies, including Prime Minister, Attorney General and Securities Commission intending to use this relationship if massive fraud was discovered.
Request To Strip Power Of Liquidators
FTX now led by restructuring expert John J Ray III asked Delaware courts through its recent filing that it should completely strip Bahamas liquidators of any powers ruling that FTX DM is an economic and legal „nullity“ with no legitimate fiat, crypto or intellectual property to resolve.
No Comment From Regulator or Liquidators Yet
The Bahamas Securities Commission and liquidators have not issued any comment on the matter as of now although previously they had mentioned Ray’s public comments demonstrate a „cavalier attitude towards truth“. Both parties however came into understanding to cooperate in January 2021