Bahamas liquidators agree to transfer FTX bankruptcy proceedings to Delaware

Bahamas liquidators agree to transfer FTX bankruptcy proceedings to Delaware
FTX logo is seen in this illustration taken, November 8, 2022. REUTERS/Dado Ruvic/Illustration

NASSAU, BAHAMAS — The FTX Chapter 15 bankruptcy petition filed in New York by the Bahamian-appointed joint liquidators has been transferred to a Delaware bankruptcy court.

FTX Trading Ltd. had filed for Chapter 11 bankruptcy in the US Bankruptcy Court for the District of Delaware back on November 11. However, the liquidators appointed by The Bahamas Supreme Court later filed a Chapter 15 suit in the Southern District of New York for FTX Digital Markets its Bahamian subsidiary.

In the first hearing into FTX’s collapse, the provisional liquidators agreed to transfer their bankruptcy case to the Delaware Court.

James Bromley, a partner with Sullivan & Cromwell law firm hired by FTX’s debt holders said during a hearing yesterday that FTX spent around $300 million buying houses in the Bahamas for senior executives. He also claimed that substantial amount of FTX’s assets is either missing or stolen, calling the FTX the “personal fiefdom” of co-founder Sam Bankman-Fried.

According to court documents, the cryptocurrency exchange owes creditors $3.1 billion. FTX has reportedly claimed in filings that it has between $10 billion and $50 billion in estimated liabilities and assets.

The Securities Commission has taken action to freeze the assets of FTX Digital Markets and related parties, in the wake of the company’s collapse.

FTX moved its headquarters from Hong Kong to The Bahamas last year, and earlier this year announced plans to invest around $60 million towards the development of a boutique hotel, commercial center, and its new headquarters on nearly five acres of land at Bayside Executive Park.