FTX collapse has shaken the whole industry. On November 12, according to the Securities Commission of The Bahamas (SCB), the commission mandated that all digital assets belonging to FTX Digital Markets (FDM) be transferred to a digital wallet it owns.
The SCB claimed in a statement dated Nov. 17 that it had moved the assets to a “digital wallet controlled by the Commission, for safekeeping,” in accordance with the authority of a Supreme Court order.
Regulators claimed the decision will protect FTX’s users
According to SCB, last week’s action was justified by the need for “urgent interim regulatory action to protect the interests of clients and creditors of FDM.”
The most recent information might provide some insight into some financial movements that were noticed last week.
Analysts estimate that $663 million was lost as a result of a number of suspicious transactions that were flagged by the cryptocurrency community on November 11 in wallets connected to FTX and FTX.US. While the remaining funds were thought to have been transferred by FTX to secure storage, $477 million were suspected to have been stolen.
The amount of FDM’s digital assets that were moved as a result of the SCB order was not mentioned in the SCB statement, though.
FDM applied for Chapter 15 bankruptcy protection in a court in New York on November 15 in an effort to have the Bahamian liquidation proceedings recognized in the United States.
In his filing, Brian Simms, the court-appointed provisional liquidator in charge of FTX Digital Markets’ bankruptcy proceedings in the Bahamas, argued that FDM was not authorized to file for Chapter 11 in the United States and rejected the filing’s legality.
In an emergency motion filed on November 17, FTX Trading Limited argued that in order to “end the chaos and to ensure that assets can be secured and marshaled in an orderly process,” both the Chapter 11 case and all proceedings pertaining to Chapter 15 filings should take place in the Delaware-based U.S. Bankruptcy Court.
Additionally, according to the same filing, there is “credible evidence that the Bahamian government is responsible for directing unauthorized access to the Debtors’ systems for the purpose of obtaining digital assets of the Debtors—that took place after the commencement of these cases.”