Reports said that the Securities Commission of The Bahamas (SCB) has denied instructing or authorizing crypto exchange FTX to prioritize withdrawals of Bahamian clients.
It has been reported that the securities commission vehemently denied the contents of a November 11 statement from FTX on Twitter that suggested it had been instructed by “Bahamian HQ’s regulation and regulators” to facilitate the withdrawal of Bahamian funds.
The statement read:
“The Commission wishes to advise that it has not directed, authorized or suggested to FTX Digital Markets, Ltd. the prioritization of withdrawals for Bahamian clients.”
However, since FTX paused withdrawals on November 9, the crypto exchange’s customers have been attempting to find means to withdraw their locked funds, with much of the activity going through The Bahamas. Strategies have ranged from buying nonfungible tokens (NFTs) on Bahamas-based accounts to offering FTX employees bounties to change their country of residence to The Bahamas.
The report said that the SCB has warned that any withdrawal of funds could be clawed back as part of the firm’s potential liquidation proceedings.
“The Commission further notes that such transactions may be characterized as voidable preferences under the insolvency regime and consequently result in clawing back funds from Bahamian customers. In any event, the Commission does not condone the preferential treatment of any investor or client of FTX Digital Markets Ltd. or otherwise.”
The latest statement from the SCB comes only days after the securities regulator froze FTX’s assets on November 10 and suspended FTX’s registration in the country. The SCB has also stripped the powers from the directors of the FTX and said it determined the “prudent course of action” was to put FTX into a provisional liquidation “to preserve assets and stabilize the company.”
Thus, according to the statement, the Bahamian Supreme Court appointed a provisional liquidator and said, “no assets of FDM, client assets, or trust assets held by FDM can be transferred, assigned, or otherwise dealt with, without the written approval of the provisional liquidator.”