Securities Commission Of The Bahamas Addresses Misstatements In FTX's U.S. Bankruptcy Case

• Published date: 19 December 2022
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Financial Services, Securities
• Law Firm: Bahamas Financial Services Board
• Author: Bahamas Financial Services Board

Nassau, The Bahamas, Tuesday 13 December 2022 - Regrettably, the Securities Commission of The Bahamas must once again correct key misstatements made by Mr. John J. Ray III, the representative of the U.S. FTX debtors, which do not appear to be concerned with facts but rather, appear intended only to make headlines and advance questionable agendas.

To be clear, the Securities Commission of The Bahamas was the first regulator in the world to take strong, decisive action to protect the customers and creditors of FTX - regardless of where they may be located. Every action taken by the Securities Commission of The Bahamas was in strict accordance with our country's legislation and with orders made by the Supreme Court of The Bahamas. These actions included securing the transfer of potentially commingled digital assets of FTX Digital Markets Ltd. and affiliates to a secure location under the authority of an Order issued by the Supreme Court of The Bahamas. The Commission holds those assets as trustee only (under Bahamian Law), and they will be ultimately distributed, to creditors and clients of FTX, wherever they may be located, in accordance with the court's direction.

Mr. Ray has referred to redacted email correspondence by and between Mr. Bankman-Fried and Bahamian officials. Those redactions were designed to create a false impression of communications between Mr. Bankman-Fried and the Commission. These redactions are disturbing as Mr. Ray is aware that the full email reveals Mr. Bankman-Fried's acknowledgement that he had 'not briefed the Securities Commission.' The Commission has previously addressed improper distributions to Bahamian citizens in its statement dated 12 November 2022. The Commission reaffirms its prior statement and notes that to the extent improper distributions were made to Bahamian citizens, such distributions will be subject to the appropriate claw back actions under the law.

The Commission also finds it disturbing that, either deliberately or through ignorance, Mr. Ray's filings and communications continue to wrongfully confuse as one, the actions of the Government of The Bahamas, the Securities Commission of The Bahamas and the Court Appointed/Court Supervised Joint Provisional Liquidators.

The Securities Commission continues to conduct a comprehensive and diligent investigation into the causes of FTX's failure, working in cooperation with law enforcement and regulatory authorities both in The Bahamas and other jurisdictions. The...