Securities Commission of The Bahamas Takes Action to Freeze Assets of FTX, Related Parties

The Securities Commission of The Bahamas (the Commission) took action “to freeze assets of FTX Digital Markets and related parties.” The Commission also “suspended the registration and applied to the Supreme Court of The Bahamas for the appointment of a provisional liquidator of FTX Digital Markets Ltd. (FDM). Mr. Brian Simms, K.C. (Lennox Paton Counsel and Attorney-at Law) was appointed as provisional liquidator.”

Additionally, the powers of the directors of FDM “have been suspended.”

And no assets of FDM, client assets or trust assets held by FDM, “can be transferred, assigned or otherwise dealt with, without the written approval of the provisional liquidator.”

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.”

Since the unfolding of events involving FDM, the Commission “has proactively dealt with the situation and continues to do so.”

The Commission determined that “the prudent course of action was to put FDM into
provisional liquidation to preserve assets and stabilize the company.”

The Commission is “committed to working with the provisional liquidator to endeavor to obtain the best possible outcome for the customers and other stakeholders of FTX.”

As noted in the update, the Securities Commission of The Bahamas (the Commission) is “a statutory body established in 1995 pursuant to the Securities Board Act, 1995.”

That Act has since been “repealed and replaced by new legislation.”

The Commission’s mandate is “defined in the Securities Industry Act, 2011 (SIA, 2011).”

The Commission is “responsible for the administration of the SIA, 2011 and the Investment Funds Act, 2019 (IFA), which provides for the supervision and regulation of the activities of the investment funds, securities and capital markets.”

The Commission is “responsible for the administration of the Financial and Corporate Service Providers Act, 2020.”

The Commission is “responsible for the administration of the Digital Assets and Registered Exchanges Act, 2020.”

For more details, check here.

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