$3.5 Billion In FTX Customer Crypto Custodied By Bahamian Watchdog

Summary:

• The Bahamian Securities Commission took control of the assets on November 12 due to concerns that FTX was vulnerable to cyberattacks.
• Hackers stole nearly $400 million in digital assets hours after Founder Sam Bankman-Fried filed for Chapter 11 bankruptcy protection on November 11.
• Notably, the tokens secured from FTX Digital Markets Ltd were worth $3.5 billion in November.

Digital currencies belonging to FTX customers are held by the Securities Commission of the Bahamas, said a press statement published by the regulator on Thursday.&

The Commission secured customer assets from FTX Digital Markets Ltd on November 12 following an exploit on the sunken crypto exchange a day before. An unknown hacker attacked the platform and stole nearly $400 million in crypto tokens. The FBI announced investigations into the hack, per reports.&

Founder Sam Bankman-Fried, Alameda CEO Caroline Ellison, and Co-Founder Gary Wang were also charged with fraud and money laundering by the Department of Justice, CFTC, and SEC.

Notably, the $3.5 billion held by the Bahamian regulator was valued using November 12 market prices. Crypto Twitter participants also speculated that a piece of the holding could be in FTT and Serum (SRM) tokens. The Commission has not responded to questions about the specific tokens held.

Thursday’s announcement also addressed claims that the Bahamas regulator told Bankman-Fried’s to open local withdrawals, denying such a request.&

FTX Customer Assets Await Court Order

The Bahamian Securities Commission said the assets will remain under custody until a Supreme Court issues an order. Per the official statement, the SCB will hold the assets in “digital wallets controlled by the Commission, for safekeeping”. The current market value of the tokens held by the watchdog is unclear at press time. 

The digital assets transferred on 12 November 2022 to digital wallets under the exclusive control the Commission are being held by the Commission on a temporary basis, until such time as The Bahamas Supreme Court directs the Commission to deliver them to the customers and creditors who own them, or to the JPLs to be administered under rules governing the insolvency estate for the benefit of the customers and creditors of FTXDM

Customers in Turkey and Japan could be the first to access their cryptocurrencies from the bankruptcy exchange. Per reports, Liquid announced a plan to return customer assets by mid-February 2023. Disgraced crypto tycoon Sam Bankman-Fried bought Liquid crypto exchange after the Japanese crypto exchange was hacked for $100 million.&

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