FTX May Need To Claw Back $100M From 1,500 Bahamian FTX Accounts

Bahamians were able to withdraw funds from their FTX accounts during a window of about 25 hours between Nov. 10 and 11

article-image

Tatohra/Shutterstock.com modified by Blockworks

share

FTX’s granting of a peculiar withdrawal window for Bahamian accounts while the rest of the world was locked out has attracted the attention of the US Congress.

Veteran insolvency expert John Ray, who took over as CEO to handle the exchange’s restructuring, testified during a Congressional committee meeting on Tuesday on FTX’s absence of record keeping and the status of the recovery of funds. 

Ray revealed that FTX’s restructuring team has so far secured more than $1 billion in assets. However, when US Rep. William Timmons asked about money withdrawn from the exchange by Bahamian citizens, Ray didn’t offer as many details. 

But Timmons revealed that Congress has a list of 1,500 Bahamians who took advantage of a window of about 25 hours between Nov. 10 and 11 to pull funds. FTX is headquartered in the Bahamas, where many key employees lived, including Bankman-Fried and Alameda Research CEO Caroline Ellison.

Loading Tweet..

FTX.com had paused withdrawals for the rest of the world at the time, a move Bankman-Fried claimed local regulators had requested (they later denied that was the case).

Some non-Bahamian residents, desperate to retrieve their frozen assets, ended up finding a loophole to do so via FTX’s NFT platform, which was left online. Bahamian residents were said to be listing very expensive — but otherwise unremarkable — NFTs, which stranded users would buy with their full balances. 

This allowed local accounts to withdraw the cash in full on their behalf. Blockworks reported at the time that the NFTs that sold for inflated prices added up $50 million in volume on the marketplace using this scheme.

The total amount allegedly taken out from Bahamian accounts is $100 million, according to Timmons, who asked Ray, “You plan on going after that money, correct?”

“We’ll investigate every potential course of action,” Ray answered. It’s still unclear how much of the funds were withdrawn by actual Bahamian residents.

When pressed on the matter again, Ray said that they will “certainly pursue every course of action to recover” the funds.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Trump insiders say he will dismantle the anti-crypto army within an hour of taking office, but the campaign has been quiet about how it plans to do so

article-image

Plus, Solana set a record for weekly unique active addresses on the network last week

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.