NASSAU, BAHAMAS — The Supreme Court of The Bahamas yesterday granted the Securities Commission of The Bahamas the right of indemnity and right to be reimbursed for expenses reasonably incurred during regulatory action taken to safeguard the digital assets of FTX Digital Markets Ltd (FDM).
The order reportedly confirms that FDM shall ultimately bear the costs the Commission incurs in safeguarding assets for the benefit of FDM’s customers and creditors, in a manner similar to other normal costs of administering FDM’s assets for the benefit of its customers and creditors.
In a statement last night, the commission said no payment may be made to the Commission without prior approval of the Supreme Court.
“As previously reported, on 12 November 2022, under the authority of an Order by the Supreme Court of The Bahamas, the Commission determined urgent action to safeguard the digital assets of FDM for the benefit of its customers and creditors was needed, and directed the transfer of certain digital assets to a digital wallet controlled by the Commission,” the statement read.
“The Order secured today confirms the Commission is entitled to be indemnified under the law and FDM shall ultimately bear the costs the Commission incurs in safeguarding those assets for the benefit of FDM’s customers and creditors, in a manner similar to other normal costs of administering FDM’s assets for the benefit of its customers and creditors.”
The statement continued: “The Commission will continue to evaluate the situation and, in cooperation with the court-supervised joint provisional liquidators of FDM and with other supervisory authorities globally, take such actions as needed to preserve the assets of FDM and to safeguard the interests of customers and creditors of FDM.”
The commission said it is continuing to investigate the facts and circumstances regarding FTX’s liquidity crisis and its impact on the operations of FDM, a registered entity.
“The Commission will hold accountable any companies or individuals found responsible for the violation of any laws administered by the Commission,” the statement added.
The Securities Commission took action to freeze the assets of FDM and related parties, in the wake of the company’s collapse earlier this month.
Liquidators for FDM have asked a New York City court to recognize the local bankruptcy proceedings, having rejected the validity of the cryptocurrency exchange’s US bankruptcy proceedings in Delaware.