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Tuesday, December 6, 2022

FTX boss accused of using offshore funds after bankruptcy

The crypto exchange says Sam Bankman-Fried was allowed unauthorized access to assets in the Bahamas

The collapsed cryptocurrency exchange FTX has provided court evidence suggesting that its former CEO, Sam Bankman-Fried, had transferred digital assets belonging to the company to regulators in the Bahamas just after filing for bankruptcy.

In a bombshell emergency court filing on Thursday, FTX claimed that the government of the Bahamas directed Bankman-Fried to gain “unauthorized access” while in custody.

While thousands of clients have been denied access to their funds, millions of dollars in crypto reportedly continued to be drained from FTX wallets over the weekend through a back door in the Bahamas.


The filing cited an interview published by Vox on Wednesday, in which Bankman-Fried expressed disdain for regulators.

“F**k regulators,” he said in the interview, adding: “They make everything worse. They don’t protect customers at all.”

“You know what was maybe my biggest single f**k up?” he asked. “Chapter 11.”

The motion lodged by FTX in the US Bankruptcy Court in Delaware says the alleged conduct puts “in serious question” a request by regulators in the Bahamas for recognition as liquidators in the bankruptcy.


READ MORE: Major crypto hub issues bankruptcy warning

“[I]n connection with investigating a hack on Sunday, November 13, Mr. Bankman-Fried and [FTX co-founder Gary] Wang, stated in recorded and verified texts that ‘Bahamas regulators’ instructed that certain post-petition transfers of Debtor assets be made by Mr. Wang and Mr. Bankman-Fried (who the Debtors understand were both effectively in the custody of Bahamas authorities) and that such assets were ‘custodied on FireBlocks under control of Bahamian gov’t,’” the filing said.

FTX, which is based in the Bahamas due to the relaxed tax laws, collapsed on November 11 in a scandal that has cost investors more than $11 billion. The debacle followed reports of mishandled customer funds and abandoned acquisition plans by rival exchange Binance.

The scandal has triggered a crisis of confidence in the cryptocurrency market and caused the value of assets including Bitcoin to sink.


For more stories on economy & finance visit RT’s business section

https://ift.tt/DWN2mzi 18, 2022 at 05:30PM
from RT – Daily news

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