The Securities Commission of The Bahamas (SCB) is denying allegations that it had directed the failed crypto-exchange, FTX, to mint US$300m tokens prior to its collapse.
“The Securities Commission of The Bahamas must once again correct material misstatements made by Mr. John J Ray III, the representative of the US FTX debtors (Chapter 11 Debtors), in both the press and court filings,” the SCB said in a statement as it challenged Ray on his allegations, they had any control over the failed crypto-exchange assets after its filing for liquidation and Chapter 11 bankruptcy.
The SCB said on December 30, last year, the Chapter 11 debtors publicly challenged the commission’s calculations of the digital assets which were transferred to digital wallets controlled by the commission on November 12, 2022, for safekeeping in the exercise of its powers as regulator acting under the authority of an order made by the Supreme Court.
It said such public assertions by the Chapter 11 debtors were based on incomplete information.
“The Chapter 11 debtors chose not to utilize their ability to request information from the joint provisional liquidators pursuant to a court order of the Supreme Court of The Bahamas that the commission obtained in an effort to allow the Chapter 11 debtors to obtain this information.
“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.”
“These statements were made in a court filing on December 12, 2022, without evidence, and then made again under oath, on December 13, before the United States’ House Financial Services Committee.
“Statements suggesting that Bahamian officials directed FTX employees to mint US$300m in new FTT tokens were widely reported by the international press. Such unfounded statements have the impact of promoting mistrust of public institutions in The Bahamas.
The SBC said the Chapter 11 debtors have also alleged that the digital assets controlled by the commission in trust for the benefit of customers and creditors of FTXDM were “stolen, without providing any substantiated bases for such claims, particularly, as to their claims to ownership of the assets.
The SBC said Ray had never reached out to confirm any information before making allegations and that it “has still not received a response to its 7 December 2022 letter to Mr. Ray offering cooperation with Chapter 11 debtors.
Last December, the chief executive officer of the of the collapsed cryptocurrency exchange, Sam Bankman-Fried, was extradited to the United States after he was arrested in The Bahamas.
A grand jury indictment charged Bankman-Fried with wire fraud and conspiracy to commit wire fraud against lenders and customers, conspiracy to commit securities fraud, conspiracy to commit money laundering, and violations of campaign finance laws.
CMC/
