Bahamian Officials Push Back Against Allegations Amid FTX Collapse
A lawyer representing the provisional liquidators overseeing FTX’s operations in the Bahamas has strongly countered allegations that officials in the country prioritized the interests of local residents during the recent collapse of the crypto exchange. In a Dec. 16 hearing for FTX Trading’s bankruptcy proceedings, Jason Zakia, partner at White & Case, stated that claims made by debtors regarding assets and the actions of Bahamian authorities were “wholly without merit.”
Zakia’s legal team represents the provisional liquidators of FTX Digital Markets, the exchange’s operations in the Bahamas, which were appointed in November by the Supreme Court of the Bahamas. According to Zakia, these liquidators had “no involvement” leading up to the bankruptcy filing initiated by FTX.
Respecting Bahamian Legal System
During the proceedings, Zakia emphasized that in cases with international implications such as this, multiple jurisdictions hold legitimate interests, with the Bahamas being no exception. He stated:
“In any international case like this, there are a multitude of jurisdictions that have legitimate and important interests and that certainly includes the Bahamas. The Bahamian legal system is an independent legal system that should be respected.”
Furthermore, he addressed the accusations that Bahamian officials facilitated payments to local residents at the expense of other creditors. Zakia remarked:
“One of the allegations […] that Bahamians were somehow facilitating payments off the system to Bahamian residents in preference to other creditors. When you look at the evidence, they have that exactly backwards. The joint provision liquidators were appointed specifically as part of an effort to stop such activity.”
Bankruptcy Proceedings Continue
FTX filed for Chapter 11 bankruptcy protection in the United States District Court of Delaware on Nov. 11. The court has since conducted several hearings regarding the management of the firm’s assets amidst competing interests from creditors and debtors associated with FTX. The next public hearing is anticipated on Jan. 11, 2023, which will likely cover the exchange’s naming rights deal for the FTX Arena.
Ongoing Legal Matters
Additionally, following a bail hearing on Dec. 13, former FTX CEO Sam Bankman-Fried was remanded in custody. This situation arises in conjunction with charges brought against him by the U.S. Department of Justice (DOJ), which has signaled its intention to continue making arrests related to the case.
