Bahamas regulator freezes FTX securities

Bahamas regulator freezes FTX securities
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The Securities Commission of the Bahamas (SCB) – the country’s securities regulator – froze the assets of FTX Digital Markets (FDM) and “related parties” in November. 10 and stopped the registration of FTX in the country.

into statement SCB said it was aware of “public statements indicating that client assets were mismanaged, mismanaged and/or transferred to Alameda Research.”

Alameda is a trading firm founded by FTX CEO Sam Bankman-Fried, the firm’s leaked balance sheet revealed a large amount of FTX Token, the native token of FTX exchanges.FTT), and rumors were financing the trade The use of FTX user funds caused a “bank-run” on FTX liquidity crisis for exchange.

SCB has now removed the powers of FTX’s directors, saying it had determined the “prudent course of action” was to temporarily wind up FTX “to protect assets and stabilize the company”.

According to the statement, the Bahamian Supreme Court appointed a provisional liquidator and “no assets of FDM, customer assets or trust assets held by FDM may be transferred, assigned or otherwise administered without the written consent of the provisional liquidator.”

FTX is headquartered in the Bahamas and FTX Digital Markets is the exchange’s Bahamian subsidiary. With FTX US A separate entity located in the United States of America.

SCB said it would work with the appointed liquidator to “achieve the best possible outcome for customers and other stakeholders of FTX”.

Cointelegraph reached out to FTX and SCB for comment, but did not immediately receive a response.

Related: The FTX turmoil is increasing industry scrutiny, something institutional investors have been waiting for

The FTX crisis has also caught the attention of regulators in the US, including House Financial Services Committee Chairwoman Maxine Waters. promotes greater consumer protection and more federal oversight of cryptocurrency trading platforms.

The White House also said that US President Joe Biden and White House press secretary Karine Jean-Pierre are aware of the situation in the crypto market. It points to the liquidity crisis of FTX It highlighted “why prudential regulation of cryptocurrencies is truly necessary.”

Update November 11, 4:00 UTC: The article incorrectly referred to the Securities Commission of the Bahamas (SCB) and has been updated to reflect the correct term.