The Bahamas seizes $3.5 bn in FTX digital assets as ex-CEO faces trial

The country's Securities Commission took control of the assets soon after the crypto exchange filed for bankruptcy in the US in November, reports revealed late on Friday.
Former CEO Sam Bankman-Fried
Former CEO Sam Bankman-Fried

SAN FRANCISCO: The government in The Bahamas has seized $3.5 billion in FTX digital assets, as its former CEO Sam Bankman-Fried faces a trial in the US.

The country's Securities Commission took control of the assets soon after the crypto exchange filed for bankruptcy in the US in November, reports revealed late on Friday.

The Securities Commission of The Bahamas said in a statement that it took the action of directing the transfer of all digital assets of under the custody or control of FTXDM (FTX Digital Markets Ltd) or its principals, valued at more than $3.5 billion, based on market pricing at the time of transfer, to digital wallets controlled by the Commission, for safekeeping.

"While certain token protocols may require the burning of old tokens and the simultaneous minting of new replacement tokens to effect transfer, in no case, did the process involve the creation of any additional tokens," it informed.

The regulator "determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of FTXDM to the prejudice of its customers and creditors".

The Commission said it will continue to investigate the causes of FTX's failure, and take such further actions as needed to preserve the assets of FTXDM and to safeguard the interests of customers and creditors.

Bankman-Fried has been released on a $250 million bond in the US, "the largest-ever pretrial bond", amid his trial for committing fraud and other criminal charges.

He will face his next hearing in New York City on January 3, 2023.

Bankman-Fried was charged by the US Attorney for the Southern District with eight counts including securities fraud and money laundering.

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