Bahamas authorities seized $3.5 billion in assets from FTX after bankruptcy

Philanthropy FTX
FILE – Signage for the FTX Arena, where the Miami Heat basketball team plays, is illuminated on Saturday, Nov. 12, 2022, in Miami. The rapid collapse of cryptocurrency exchange FTX into bankruptcy last week has also shaken the world of philanthropy, due to the donations and influence of FTX founder Sam Bankman-Fried in the “effective altruism” movement. (AP Photo/Marta Lavandier, File) Marta Lavandier/AP

Bahamas authorities seized $3.5 billion in assets from FTX after bankruptcy

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Authorities in the Bahamas acquired more than $3.5 billion in digital assets from the crypto exchange FTX after the company filed for bankruptcy.

The authorities acquired the assets due to a risk of “imminent dissipation,” according to a statement provided by FTX founder Sam Bankman-Fried. The funds were taken after reports of cyberattacks on FTX’s systems and the theft of hundreds of millions of assets.

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The assets are under the Bahamian Securities Commission’s “exclusive control” until the country’s Supreme Court rules that the regulator can return said assets to the crypto exchange’s former customers or joint liquidators.

The commission has been scrutinized for its role in handling FTX’s financial assets. While the regulator initially attempted to handle insolvency proceedings, FTX’s lawyers pushed back against the commission by arguing that the government regulator had coordinated with Bankman-Fried and they did not trust the Bahamian government.

The Department of Justice announced on Tuesday that it was investigating the theft of $372 million from FTX’s accounts on Nov. 12, a day after the company filed for Chapter 11 bankruptcy protections.

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Bankman-Fried was arrested in the Bahamas and extradited to the United States, where he appeared in court for the first time last week. He was released on $250 million bail and was forced to live with his parents. He is expected to enter a plea deal as early as next week.

That has not stopped him from receiving visitors, however. The Big Short author Michael Lewis visited SBF last Friday for several hours, the latest meeting between the two over six months for a book deal.

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