The Commission said the US FTX debtors’ calculations “were based on incomplete information”.
The Bahamas Securities and Exchange Commission has disputed FTX’s claim that the value of the cryptocurrencies it seized from the bankrupt crypto exchange was not $3.5 billion. The “continued lack of diligence by the new head of FTX in making public statements about the Commission is disappointing,” the Bahamian regulator stressed.
Bahamas Regulator and FTX Disagree on Value of Seized Crypto Assets
The Bahamas Securities and Exchange Commission issued a statement Monday to “correct material misstatements” made by FTX’s new CEO, John J. Ray III, regarding the value of cryptocurrencies it seized from FTX. Ray represents US FTX debtors in the cryptocurrency exchange’s bankruptcy filing (Chapter 11 Debtors).
The Bahamian regulator explained that on December 30, 2022, FTX and Ray “publicly challenged the Commission’s calculations” of the value of crypto assets transferred to their digital wallets on November 12. According to the Commission, more than $3.5 billion in cryptocurrency was seized from FTX. However, Ray argued that the value of the digital assets transferred on that date was actually around $296 million.
The Commission’s Statement
In its statement on Monday, the Commission said that the US FTX debtors’ calculations “were based on incomplete information”, stating the following:
“The Chapter 11 Debtors chose not to use their ability to request information from the joint provisional liquidators pursuant to an injunction of the Supreme Court of the Bahamas… The US debtors’ continued lack of diligence in making public statements about the Commission is disappointing.”
The Bahamas regulator alleged that FTX’s new CEO made false statements about the Commission in a court filing on December 12, 2022, “without evidence,” and again under oath, on December 13, before the House Financial Services Committee.
The U.S. Representatives regulator specifically mentioned the allegation that it asked former FTX CEO Sam Bankman-Fried (SBF) to mint “a substantial number of new tokens” during the cryptocurrency exchange’s bankruptcy proceedings.
The Commission added the following:
“Mr. Ray has not once approached the Commission to discuss any of his concerns before airing them publicly.”
Notably, Ray was named FTX’s new CEO and its head of restructuring when Bankman-Fried stepped down as the cryptocurrency exchange filed for bankruptcy. Ray, who also led Enron during the energy giant’s bankruptcy, said of FTX in November: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial information as it happened here.”
The Bahamas Securities and Exchange Commission further revealed that FTX’s new CEO did not respond to a letter issued on December 7th, in which the Bahamian regulator offered “cooperation with Chapter 11 Debtors.”
By Audy Castaneda
