FTX may have committed serious fraud and mismanagement: The Bahamas Liquidators

After a week of internal implosion, FTX’s legal troubles worsened. According to the latest court filings from the company’s Bahamian liquidators, there are signs of “serious fraud and mismanagement” on the part of the bankrupt cryptocurrency exchange.

The document filed with the US Bankruptcy Court for the Southern District of New York revealed that joint interim liquidator findings to date indicated that FTX may have committed serious fraud and mismanagement.

The filing seeks to temporarily block the company’s sale of any assets until a ruling is reached by the courts under Chapter 15 of the US Bankruptcy Code, which deals with bankruptcy cases involving more than one state.

Charges against FTX

FTX’s problems don’t end there. According to a report released Tuesday, the court-appointed interim liquidator in charge of the stock exchange’s bankruptcy proceedings in the Bahamas, Brian Sims, has challenged the validity of a Chapter 11 bankruptcy filing by its subsidiary FTX Trading and more than 100 collective Delaware subsidiaries. court.

The Bahamas-based attorney stressed that FTX Digital is not part of the Delaware petition, adding that only the interim liquidator is “authorized to take any action including, but not limited to, the filing of the Delaware petition.”

“The temporary liquidation order deprives the directors of FTX Digital from the ability to act or exercise any functions for or on behalf of FTX Digital unless expressly requested to do so in writing.”

Simms also claimed that he rejects the validity of any “FTX Affiliates’ alleged bankruptcy attempt” because he did not “authorize or consent, in writing or otherwise.” He further confirmed that the FTX brand and all of its core management personnel ultimately operate from the Bahamas.

However, the lawyer is not asking the court to dismiss the bankruptcy proceedings in the United States, but instead has requested that the courts in the country recognize the legal proceedings in the Bahamas.

Extradition, Subpoenas and more

FTX investors have filed a lawsuit in Miami against former CEO Sam Bankman-Fried. According to reports, the lawsuit alleges that the cryptocurrency-generating accounts were unregistered securities that were illegally sold in the United States. It is seeking $11 billion in damages from several celebrities involved in promoting FTX, including tennis star Naomi Osaka and NFL quarterback Tom Brady.

Law enforcement officials from both countries are currently in talks about whether to extradite the SBF to the United States for questioning.

As allegations against FTX and its operators intensified, Bahamian Prime Minister Philip Davis argued that the existing framework would not have prevented the collapse.

FTX May Have Committed Serious Scam And Mismanagement: Bahamian Whistleblowers Appeared For The First Time On CryptoPotato.

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