FTX Digital Assets Seized by Authorities in Bahamas

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Nov 16, 2022

Image copyright: Reutersstory last updated Nov 18, 2022

The Facts

After filing for Chapter 15 bankruptcy in the US on Tuesday, the assets of FTX Digital Markets have been seized by the Securities Commission of The Bahamas. This comes after a bankruptcy court filing alleged that the crypto exchange issued unreliable financial statements, mishandled confidential data, and used corporate funds to buy homes for employees in the Bahamas.
FTX Digital, a non-US company unit, is using Chapter 15 to shield itself from creditors seeking to file lawsuits and tie up assets in the US. Bahamian authorities say they've transferred the assets to a digital wallet under their control for "safekeeping."

The Spin

Pro-establishment narrative

The collapse of FTX shows just how risky it is to invest in cryptocurrency. The US government, among others, is justifiably investigating the matter, and it's key to track how the public sector will respond through legislation. Companies like FTX need to be regulated the same way traditional banks are.

CBS

Establishment-critical narrative

The pious calls of regulators are disingenuous. Besides the current headlines of bankruptcy, financial fraud, and risky investments, FTX's relationship with politicians and governments also needs scrutiny. The multi-billion-dollar exchange was used for everything from funding Ukraine's war effort to political campaign donations in the US. The public sector got tangled up in this crypto mess.