- Two of the members of accounts auditing firm PwC will be in charge of liquidating the assets of FTX as guarantees for the exchange’s clients.
- The Bahamas Securities Commission emphasized the necessity of acting quickly due to the scale of the case.
Monday, November 14th, heralded the appointment of the FTX Group liquidation board by financial regulators in the Bahamas. The liquidators are tasked with engaging with proceedings in the foreclosure of the company’s assets as soon as possible with the intent to return funds to clients of the crypto exchange.
Last week, authorities in the Caribbean country disclosed that they had opened investigation into the company and its owner, Sam bamkman-Fried, to determine whether they had engaged in any “criminal misconduct.”
Moving to secure the company’s assets, the Bahamas Securities Commission elected to freeze the assets of FTX Digital Markets (FDM), and rescinded the exchange’s license to operate in the region.
After obtaining authorization from the supreme court, the regulator has proceeded to appoint two executives from global accounting and auditing firm PwC to oversee FTX Digital Markets Ltd, the local subsidiary of FTX.
The appointed officers, Kevin Cambridge and Peter Greaves, are tasked with overseeing the liquidation of the FTX unit, while Brian Simms, a partner at Bahamian law firm Lennox Paton, will assist with settlement work.
The operations of FTX became exposed revelations about its insolvency and poor financial strength were revealed, leading to a massive bank run culminating in the withdrawal of more than $6 billion worth of cryptocurrency in just 72 hours.
On Friday, November 11th, the company filed for ‘Chapter 11‘ bankruptcy after failing to secure aid. The promise of acquisition made by rival exchange Binance ultimately fell through after its oversight team identified alleged administrative mismanagement, and due to ongoing investigations by U.S. agencies.
The Bahamian regulator said in a statement, cited by Reuters, that "given the magnitude, urgency, and international implications of the unfolding events with regard to FTX, the Commission recognized that it had to, and moved swiftly."
It further added that the purpose was “to further protect the interests of clients, creditors, and other stakeholders globally.”
On the Flipside
- Neither FTX nor its former CEO have responded to requests for comment from news agencies as the high-profile case draws on.
- The scandal and bankruptcy of the once great crypto exchange has caused serious damage to the confidence of institutional investors in digital assets.
Why You Should Care
FTX was founded by SBF in 2019, and quickly rose to become one of the leading cryptocurrency trading platforms globally. In light of all that has recently come to light, the former titan of the industry is now considered a clear example of how not to operate in the cryptocurrency industry. Some analysts are even rethinking whether a stable cryptographic ecosystem is truly viable.
Find out more about the FTX debacle below: