In the latest update to the FTX fiasco, Bahamian Securities Commission [BSC] took control of more than $3.5 billion of customers’ assets.
The regulator through a recent press release warned of 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.”
Beginning in November 2022, the once major crypto exchange filed for bankruptcy caused of a liquidity crisis of the firm’s token, FTT.
Within hours of the filing, an unknown actor who is believed to be an external hacker stole tokens worth $372 million from the exchange.
The following day, FTX’s newly appointed CEO John Ray, attorney, and insolvency professional confirmed the “unauthorized access” to the exchange. The US Department of Justice blocked funding as part of the probe.
Further investigation revealed that the stolen cryptocurrency was traded for ether on decentralized exchanges, a report by blockchain analytics company Elliptic stated, last month.
Additionally, some of these funds had also passed through a “mixer,” which blends various cryptos to mask their source.
Former CEO Sam Bankman-Fried stated that the FTX heist might have been an inside operation before his arrest earlier this month, although there is no evidence to substantiate it.
As for the seized assets, they will be held until the Bahamas Supreme Court instructs the Commission to return them to the customers and creditors who possess them, according to the media release.
The $3.5 billion in tokens that were moved, as per the Commission, were no longer accessible to FTX founders Sam Bankman-Fried and Gary Wang.
FTX: Bahamian Commission Insisted No Bias Against Clients
The Commission underlined in the media release that it did not order FTX to give Bahamas-based clients’ withdrawals top priority.
Meanwhile, the US regulator, the Securities and Exchange Commission [SEC] claimed that $200 million of the billions of dollars in FTX client funds have been used to invest in two companies.
As previously reported by TronWeekly, the first transaction was struck in March, when its FTX Ventures division invested $100 million in a fintech company called Dave. The other transaction involved a $100 million investment in September for the Web3 business Mysten Labs.
Although, there is no evidence linking Mysten and Dave to any alleged wrongdoing at the failed exchange. The transactions, however, seem to be the first instances of SBF’s exchange using client cash for startup financing that have been officially documented.