Bahamas denies minting FTX tokens, upholds asset valuation

The Securities Commission of The Bahamas today slammed the debtors of the bankrupt cryptocurrency exchange FTX over “material misstatements” made by the US lawyer liquidating its assets.

In a Tuesday statement sent to the press, SCB said FTX’s new CEO John Ray challenged its calculations of the digital assets which were transferred to its custody for “safekeeping in the exercise of its powers as regulator acting under the authority of an Order made by the Supreme Court of The Bahamas.”

Liquidators in the island nation said that such “public assertions” were based on incomplete information. It added that FTX’s debtors chose not to request information from the Joint Provisional Liquidators to obtain the correct facts.

“The US Debtors’ continued lack of diligence when making public statements concerning the Commission is disappointing, and reflects a cavalier attitude towards the truth and towards The Bahamas that has been displayed by the current officers of the Chapter 11 Debtors from the date of their appointment by Sam Bankman-Fried,” the statement reads.

SCB also dislodged claims of John Ray that before Bankman-Fried was blocked from FTX systems, it asked him to mint new tokens worth hundreds of millions of dollars. Bahamas regulators further refuted the statement by the legal team in control of FTX that alleges some of the exchange’s assets were stolen after the transfer of those tokens to the control of island officials.

The commission added that those in charge of overseeing FTX’s bankruptcy process  used redacted email correspondence between the former CEO and Bahamian officials “to create a false impression of communications between Mr. Bankman-Fried and the Commission.”

The accusations escalate a battle between the FTX’s legal team and Bahamas regulators. The SCB asked a US court for access to “FTX’s AWS system” which is controlled by John Ray and his team.

Debtors of the bankrupt cryptocurrency exchange FTX casted doubt over claims by Bahamas regulators that they seized $3.5 billion worth of cryptocurrency.

When FTX spiraled toward collapse in mid-November, Bahamian regulators took control of digital assets worth just $296 million, including 195 million FTT, 1,938 ETH and other miscellaneous coins that “do not have substantial value,” the creditors say.

Assuming the entire amount of FTT tokens could be sold at spot prices, the total sum taken from FTX’s Bahamian subsidiary was worth $167 million on December 30, 2022. After the allegations, the watchdog responded with a denial, in turn accusing FTX liquidators in the US of mis-stating facts in order to advance their own agenda.