- Agency also suspended FTX.com’s registration to operate
- Founder Bankman-Fried seeking funding to stave off bankruptcy
The Bahamas Securities Commission has frozen the assets of FTX Digital Markets “and related parties” as the crypto platform company teeters closer to collapse.
An asset freeze was “the prudent course of action” to preserve assets and stabilize the company, the agency said Thursday in a statement. An attorney has been appointed provisional liquidator as the Bahamas securities regulator seeks to place the beleaguered crypto exchange into receivership.
“The commission is aware of public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research. Based on the commission’s information, any such actions would have been contrary to normal governance, without client consent and potentially unlawful,” it said.
The asset freeze is the latest twist in a wild week for FTX and founder Sam Bankman-Fried. It included a takeover offer from rival exchange Binance that was pulled a day later, the threat of bankruptcy without a multibillion-dollar cash infusion and the shuttering of Alameda Research, the trading house at the heart of his digital-asset empire.
FTX Digital Markets is the Bahamian subsidiary of FTX Trading, operating as FTX.com. The exchange is based in the Bahamas and is a separate legal entity from FTX US.
Representatives for FTX.com and Bankman-Fried didn’t immediately respond to a request for comment.
Investors are becoming increasingly anxious over the blurred lines among Bankman-Fried’s business interests, as evidenced by what’s transpiring at his US-based crypto exchange.
Employees of FTX US are in talks about selling parts of the business, including some assets that Bankman-Fried amassed on a sweeping acquisition tear across the industry, according to two people with direct knowledge of the matter, who requested anonymity because the talks were private.
Those employees, in some cases without Bankman-Fried’s participation, are pitching assets including stock-clearing platform Embed and naming rights to an arena in Miami, one of the people said.
FTX US on Thursday said that customers should close out any positions they want to and that trading may be halted in a few days.
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