A dispute between FTX U.S. and Bahamas authorities has worsened amidst a hearing set to occur later this week. A report from Coindesk notes that the two sides are preparing for the court hearing. At the same time, the conflict between the United States arm of the disgraced crypto exchange and Bahamian regulators escalates.
The report notes that both parties are jockeying to pin the underhanded dealings of former CEO Sam Bankman-Fried on the other. Moreover, that former CEO is awaiting his own trial for eight counts of conspiracy and fraud levied against him last month.
FTX Vs. Bahamas Authorities Heats Up
It has undoubtedly been a scandal unlike any that the crypto industry has seen in its relative youth. The downfall of FTX was a tragedy that is still affecting various corners of the market through the contagion of its bankruptcy and the symptoms of its scandal.
Now, with bankruptcy and criminal court proceedings set to take place in the coming month, one conflict is certainly gaining some steam. FTX U.S. and Bahamas authorities are currently embroiled in a dispute that is set to crescendo in a court appearance this week.
Coindesk initially reported on the fight, noting that the central disagreement surrounds access to FTX’s internal systems. Furthermore, the sides are disputing who could have had access to “Slack messages and the QuickBooks accounting software.” Bahamas liquidator Bian Simms stated his need for the “data to wind up his side of the company,” according to local court ordinances in November. In response, FTX CEO John Ray remarked the request as having, a “staggering overbreadth.”
As a Deleware bankruptcy court prepares to adjudicate both parties, accusations have run rampant. Specifically, both have thrown allegations of being “reckless in the extreme,” and boasting a “cavalier attitude towards the truth.”
The differing sides show varied opinions on the operating capacity of the other. Correspondingly, the liquidators claim FTX was in practice run from the Bahamas. Conversely, John Ray claims the Bahamas arm was “at best a sideshow.”
Additionally, in a legal deposition on Friday, Ray argued that FTX Digital MArkets was “never the center of the FTX group,” in a statement. Furthermore, stating it as a “virtual nullity” in Bankman-Fried’s dealings.
Subsequently, Ray continued to claim that FTX brass and the Bahamian government colluded, leaving the company “more closely resembling a crime e scene than an operating business.” The Bahamas Securities Commission was said to have “worked with Mr. Bankman-Fried, under criminal indictment for one of the largest financial crimes in history… to take digital assets” from FTX’s cloud. Thus, accusing the liquidators of malpractice.
Conclusively, Ray questions the claim made by Bahamian authorities that they hold $3.5 billion in FTX assets. Ultimately, Cpoindesk notes that either Bahamaina regulators have more assets than disclosed, or the 195 million shares of the FTT token they acquired are now worth $167 million due to the collapses.