FTX Faces Another Blow, This Time From The Bahamas Commission
The Bahamas Securities Commission has responded to "unsubstantiated" allegations made in its latest meeting with the new FTX management.
The Bahamas financial regulator has branded FTX's new management "cavalier" as they objected to statements made by the collapsed exchange.
In a statement released on Monday evening, the Securities Commission of The Bahamas (SCB) sought to "correct material irregularities" committed by new FTX chief executive John J Ray III during the bankruptcy process.
The discrepancies mainly relate to the value of assets held by FTX since the bankruptcy petition was filed last month.
The assets are worth $3.5 billion, according to Bahamian authorities, but the price is based on the market value at the time they were seized; their current value is likely to be much lower. FTX has disputed these calculations, saying that at the time the Bahamian authorities seized the assets, they were worth $296 million.
In a court filing as part of FTX's bankruptcy proceedings, the management said they had been subjected to "obstruction" by the SCB, and that the regulator and other Bahamian authorities had shown "a complete disinterest in providing any information, including an accounting of the diverted assets."
The SCB on Tuesday commented that FTX's statement came from incomplete information, and that the debtors had chosen not to exercise their option to request information from the joint provisional liquidators overseeing the insolvency proceedings.
"The continued lack of diligence by the US debtors in making public statements regarding the commission is disappointing and reflects the callous attitude towards the truth and the Bahamas that the current Chapter 11 debtors' representatives have displayed since the date of their appointment by Sam Bankman-Fried," the SCB said.
The report also speaks specifically about John J Rayevi III, who is currently the alternate CEO of FTX.
"At no time did Mr. Ray contact the Commission to discuss his concerns with the Commission before publicly expressing them," the SCB said."The Commission has not yet even received a response to its December 7, 2022 letter to Mr. Ray offering to work with the Chapter 11 debtors."
The entire dispute revolves principally around foreclosed property
Most of the disagreement between regulators and the new FTX management concerns assets controlled by the Commission. In its latest statement, the SCB responded to other claims by the debtors that these assets were "stolen," also objecting to "unsubstantiated" claims that FTX employees were allegedly ordered to mint $300 million in new FTT tokens.
SCB has previously said it has a court order to seize these assets, mainly due to concerns about their security during the hacking attack FTX faced in mid-November 2022.
"Although some token protocols require the burning of old tokens and the simultaneous mining of new replacement tokens in order to effect the transfer, in no way did this process involve the creation of additional tokens," the Commission said in a statement on December 29.
Source: decrypt.co
analyst opinion
Jakub Odvářka
The Bahamas financial regulator has branded FTX's new management "cavalier" as they objected to statements made by the collapsed exchange.
In a statement released on Monday evening, the Securities Commission of The Bahamas (SCB) sought to "correct material irregularities" committed by new FTX chief executive John J Ray III during the bankruptcy process.
The discrepancies mainly relate to the value of assets held by FTX since the bankruptcy petition was filed last month.
The assets are worth $3.5 billion, according to Bahamian authorities, but the price is based on the market value at the time they were seized; their current value is likely to be much lower. FTX has disputed these calculations, saying that at the time the Bahamian authorities seized the assets, they were worth $296 million.
In a court filing as part of FTX's bankruptcy proceedings, the management said they had been subjected to "obstruction" by the SCB, and that the regulator and other Bahamian authorities had shown "a complete disinterest in providing any information, including an accounting of the diverted assets."
The SCB on Tuesday commented that FTX's statement came from incomplete information, and that the debtors had chosen not to exercise their option to request information from the joint provisional liquidators overseeing the insolvency proceedings.
"The continued lack of diligence by the US debtors in making public statements regarding the commission is disappointing and reflects the callous attitude towards the truth and the Bahamas that the current Chapter 11 debtors' representatives have displayed since the date of their appointment by Sam Bankman-Fried," the SCB said.
The report also speaks specifically about John J Rayevi III, who is currently the alternate CEO of FTX.
"At no time did Mr. Ray contact the Commission to discuss his concerns with the Commission before publicly expressing them," the SCB said."The Commission has not yet even received a response to its December 7, 2022 letter to Mr. Ray offering to work with the Chapter 11 debtors."
The entire dispute revolves principally around foreclosed property
Most of the disagreement between regulators and the new FTX management concerns assets controlled by the Commission. In its latest statement, the SCB responded to other claims by the debtors that these assets were "stolen," also objecting to "unsubstantiated" claims that FTX employees were allegedly ordered to mint $300 million in new FTT tokens.
SCB has previously said it has a court order to seize these assets, mainly due to concerns about their security during the hacking attack FTX faced in mid-November 2022.
"Although some token protocols require the burning of old tokens and the simultaneous mining of new replacement tokens in order to effect the transfer, in no way did this process involve the creation of additional tokens," the Commission said in a statement on December 29.
Source: decrypt.co
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