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Bahamas Regulator Freezes FTX Assets as the second-largest cryptocurrency exchange fights for its existence. In the latest development, the Bahamas securities commission has banned the assets of FTX’s Bahamas business. The assets of FTX Digital Markets and related parties have been frozen, according to a statement released on Thursday by the Bahamas Securities Commission.
The commission declared that “no assets of FDM, client assets, or trust assets held by FDM, may be moved, assigned, or otherwise dealt with, without the written authorization of the interim liquidator.” The directors’ power has been stopped, the commission said.
The commission also noted in its statement that it had taken note of recent allegations that assets belonging to FTX clients had been mishandled, handled inappropriately, or transferred to Sam Bankman-bitcoin Friend’s hedge fund Alameda Research.
“Based on the commission’s information, any such actions would have been contrary to normal governance, without client consent and potentially unlawful,” it said.
The choice was taken as Bankman-Fried hurried to raise money to plug a hole in the Bahamas-based exchange’s finances that, according to some estimates, could be as big as $8 billion (£6.8 billion) if customers leave.
On Friday, Changning Zhao, the founder of FTX’s rival Binance, warned the cryptocurrency market that it was on the verge of a catastrophe similar to the one that occurred in 2008 and that there would be more failures to come. He reportedly said this week’s events were “probably an accurate analogy” to the global financial crisis during a conference in Indonesia, according to the Financial Times.
The Department of Justice and the Securities and Exchange Commission in the US are reportedly looking into FTX to see whether any crimes or securities offences have been committed. The US platform of FTX, which is separate from the company’s worldwide exchange, has issued a warning that trading may be discontinued in “a few days,” according to a story published on Friday in The Australian Financial Review. The Australian subsidiary of FTX has been put under administration.
According to reports, the US Department of Justice and Securities and Exchange Commission are investigating FTX to see whether any crimes or securities offences have been committed. The Australian Financial Review reported on Friday that the FTX US platform, which is distinct from the company’s global exchange, has issued a warning that trading may be suspended in “a few days.” FTX’s Australian affiliate has been placed in administration.
