- The assets of FTX Digital markets, a subsidiary of FTX, have been frozen by the Bahamas securities regulator.
- It claimed it is aware of statements suggesting that the firm mishandled client assets or transferred them to Alameda Research.
- According to the Bahamian Securities Regulator, such actions would be “contrary” to normal governance.
Sam Bankman Fried’s poor week just got worse
Certain assets of FTX Digital Markets — a subsidiary of Bankman-Fried’s FTX crypto exchange — have been frozen by the Bahamas securities regulator, the authorities said in a Thursday media release
K.C. Attorney Brian Simms After petitioning the Supreme Court of The Bahamas regarding the release state, Brian Simms, K.C., was appointed as a provisional executor.
FTX, It moved its headquarters.From Hong Kong to the Bahamas, September 2021 has seen a liquidity crisis that has lasted for days.
The Securities Commission of the Bahamas announced that it is aware of statements suggesting FTX mishandled and mismanaged client assets or transferred them to Alameda Research (Bankman-Fried’s crypto trading company).
“Based on information from the Commission, such actions would have been against normal governance, without client consent, and potentially illegal,” said the Bahamian securities regulator.
Sources confirmed to Reuters Bankman-Fried had transferred $4 billion from FTX to Alameda earlier in 2022 without telling anyone, the news agency reported on Thursday.
Bahamian securities regulator stated it determined that provisional liquidation was the prudent course of action for FTX Digital Markets to preserve assets and stabilize company.
Bankman-Fried’s running pillar is to raise funds for FTX
Bankman-Fried told investors that the firm could go bankrupt if it didn’t receive emergency financing. BloombergReporting earlier Thursday, citing someone with direct knowledge of this matter. Bloomberg reported that FTX was facing a financial crisis of up to $8 billion. They were trying to raise $4billion to keep their business afloat.
Later that day, FTXOn Twitter, Tron announced that they have reached an agreement to transfer Tron assets from FTX, a crypto network.
Over the weekend, FTX was in turmoil. There was a Twitter feud between Bankman and Fried. Changpeng Zhao, Binance CEO, is “CZ” Zhao. The latter tweeted on Sunday that Binance would be liquidating all its FTT tokens — a crypto token native to FTX — due to “recent revelations.”
While he didn’t mention his concerns at the moment, a November 2 CoinDesk ReportFTX’s liquidity situation had been provoking market fears. Zhao was then attacked by Bankman-Fried on Monday via Twitter. He tweeted: “A competitor wants to go after me with false rumors,” per media reports. Bloomberg and Reuters.
Bankman-Fried Zhao then appeared to have made up with as both announced a Binance deal to acquire FTX.But Binance called off its acquisition plan on Wednesday, Citing issues “beyond our control or ability to help.”
The drama had a negative impact on market sentiment and prompted a rush to withdraw. In the 72 hours prior to Tuesday morning, FTX had withdrawn approximately $6 billion. Reuters reported, citing a message Bankman-Fried sent to staff.
FTX did in fact not respond immediately to Insider’s request.
