FTX calls for Bahamian liquidators to stop!

• Financial

According to Bloomberg, FTX has asked a US bankruptcy judge to protect its assets from liquidators set to sell the Bahamian unit. In a lawsuit filed against liquidators overseeing the sale of its Bahamian affiliate, FTX Digital Markets, FTX said the latter are wrongly claiming ownership of the exchange's assets.

The lawsuit alleges that the Bahamian affiliate was a corporate shell and the centerpiece of founder Sam Bankman-Fried's effort to funnel FTX Trading's client deposits and other valuable property and rights to the Bahamas, out of reach of authorities regulators and the American courts.

Therefore, it is asking US bankruptcy judge, John Dorsey, to step in and rule that the assets deposited by Sam Bankman-Fried and other employees in the Bahamian unit were fraudulently transferred and therefore belong to FTX.

The document said that without US bankruptcy court intervention, Bahamian liquidators will continue to make baseless claims that will harm FTX.com's customers and all other creditors of FTX's debtors. Sam Bankman-Fried was arrested in the Bahamas after US prosecutors formally filed criminal charges against him.

He was eventually extradited to the United States, where he was released after posting $250 million bail in a New York court. Three members of Bankman-Fried's inner circle have already pleaded guilty and pledged to cooperate with officials.

These are Nishad Singh, former chief technical officer of FTX, former managing director of Alameda Research Caroline Ellison and Gary Wang, former chief technology officer of FTX. Bankman-Fried was charged with eight felonies but pleaded not guilty.

He faces more than 100 years in prison. Liquidators of the Bahamian division recently asked the Supreme Court of the Bahamas to decide which entity of FTX is responsible for reimbursing customers and should control its assets, Reuters reported.

They also argued that the Bahamian company has taken a more central role for FTX.com. FTX argues that FTX Digital Markets never performed any significant service and that the secret amendment to the company's terms of service did not transfer any ownership or liability to FTX Digital Markets.

FTX and its group of crypto companies filed for Chapter 11 bankruptcy in early November. The exchange has since been in conflict with Bahamian officials.