Did The Bahamas Really Seize $3.5B in Crypto? FTX Says No

Last week, the Securities Commission of The Bahamas (SCB) said it altogether sent FTX crypto worth $3.5 billion, valued at the time of transfer, for safekeeping on Nov. 12.

The transfers were made shortly after FTX filed for bankruptcy in the US and amid odd cyberattacks on the platform.

FTX, under insolvency veteran John J. Ray III, challenged those figures in a Friday press release, which said the regulator only holds crypto worth around $296 million in a single wallet with infrastructure startup Fireblocks.

According to FTX, the SCB took control of around:

• 195 million FTT ($166 million), 
• 1,938 ETH ($2.35 million) and 
• “other miscellaneous coins that do not have substantial value.”

“The value of the same cryptocurrency at spot prices as of 2:00 PM EST on December 30, 2022 was approximately $167 million,” FTX said, assuming the FTT could be sold in full at spot prices. “There can be no assurances such a large amount of FTT could be sold at spot prices, or at all.”

Those figures align with initial reports of funds — including hundreds of millions of dollars in freshly-minted FTT — being sent to cold storage at the direction of Bahamas regulators.

FTX requested the SCB share a detailed list of cryptocurrencies it has under its control, which it says should clear up any confusion. 

The SCB shot back at FTX on Monday with a press release shared via Twitter. The regulator said FTX’s figures were based “on incomplete information,” and suggested FTX should’ve filed for the information to be released with the Bahamas Supreme Court.

“Mr. Ray has not once reached out to the commission to discuss any of his concerns before airing them publicly,” the SCB said. The regulator gave no further information as to the cryptocurrency in question.

The public tit-for-tat is no doubt frustrating for FTX creditors, which could amount to as many as one million. 

The SCB has previously said it will keep the crypto until The Bahamas Supreme Court orders it onto FTX creditors or joint provisional liquidators — whenever that may be.

David Canellis contributed reporting.

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