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Breaking: Bahamian Securities Regulator Freezes FTX Assets CryptoBlog

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The Bahamas Securities Commission (SCB) – the country’s securities regulator – froze the assets of FTX Digital Markets (FDM) and “related parties” on November 10 and suspended FTX’s registration in the country.

In a statement, SCB said it was aware of “public statements suggesting that client assets were mishandled, mismanaged and/or transferred to Alameda Research.”

Alameda is a trading company founded by FTX CEO Sam Bankman-Fried, a leaked balance sheet from the company showed it held large amounts of the FTX exchanges native token, FTX Token (FTT), and rumors that it was funding trades using FTX user funds led to a “bank-run” on FTX causing a liquidity crunch for the exchange.

SCB has now stripped the powers of FTX’s directors and said it has determined the “prudent course of action” is to put FTX into provisional liquidation “to preserve assets and stabilize the company.”

According to the statement, the Supreme Court of the Bahamas has appointed a provisional liquidator and declared that “no FDM assets, customer assets or trust assets held by FDM may be transferred, assigned or otherwise dealt with without the approval writing from the provisional liquidator.

FTX is headquartered in the Bahamas and FTX Digital Markets is the exchange’s Bahamian subsidiary along with FTX US, a separate US-based entity.

SCB said it will work with the appointed liquidator to “achieve the best possible outcome for FTX’s customers and other stakeholders.”

Cointelegraph contacted FTX and the SCB for comment but did not get an immediate response.

Related: FTX Unrest Increases Industry Scrutiny, What Institutional Investors Have Been Waiting For

The crisis with FTX has also caught the attention of regulators in the United States with House Financial Services Committee Chair Maxine Waters pushing for greater consumer protections and federal oversight of platforms. of cryptocurrency trading.

The White House also said US President Joe Biden is aware of the crypto market situation with White House press secretary Karine Jean-Pierre alluding to the FTX liquidity crunch that has highlighted “why careful regulation of cryptocurrencies is indeed necessary”.

Update November 11, 04:00 UTC: The article incorrectly referred to the Securities Commission of The Bahamas (SCB) and has been updated to reflect the correct term.