FTX.com Faces Troubles as Bahamas Regulators Freeze Assets

As Sam Bankman-Fried’s crypto empire comes under tatters, securities regulators in the Bahamas decided to freeze the assets of FTX.com. In a statement on Tuesday, the Bahamas Securities Commission said that the decision to freeze FTX Digital Markets was “the prudent course of action”.

FTX.com has been registered in the Bahamas and has been operating from there over the last few years. The authorities have also appointed a provisional liquidator to assess whether the company is sound or should be liquidated.

This is the first major step by a securities regulator on FTX.com after the crisis unraveled over the last week. However, the FTX chief has declined to file for bankruptcy and has been working for fresh funding of $9.4 billion. In its statement, the Bahamas regulator wrote:

“The commission is aware of public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research. Based on the commission’s information, any such actions would have been contrary to normal governance, without client consent and potentially unlawful.”

FTX Digital Markets works as the Bahamian subsidiary of FTX Trading, also known as FTX.com. It offers derivatives, options, and other products and services to customers.

FTX Chief Announces the Shutdown of Alameda Research

On Thursday, the FTX chief also announced his decision to shut down Alameda Research, the company’s trading house that has been at the heart of the recent crisis. Besides, the SEC is also investigating Sam Bankman-Fried for any potential violation of securities rules. In an internal message to staff, FTX US’s general counsel, Ryne Miller, said:

“FTX US looks prepared to make payroll at least in the next cycle. Folks should prepare to make their own choices as appropriate for their personal situation on next steps.”

In a tweet on Thursday, SBF said that FTX US was “100% liquid” and not impacted financially by the operations of FTX.com. However, FTX US could halt its trading activity in a few days and users have been requested to close down any positions.

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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