The Securities Commission of The Bahamas has frozen all non-US assets belonging to Sam Bankman-Fried’s collapsed crypto exchange FTX.
“Today, the Securities Commission of The Bahamas took action to freeze assets of FTX Digital Markets and related parties, read the statement. “The Commission also suspended the registration and applied to the Supreme Court of The Bahamas for the appointment of a provisional liquidator of FTX Digital Markets Ltd.”
The Commission said it was “aware of public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research,” calling SBF’s actions “potentially unlawful”.
Although FTX is based in the Bahamas capital of Nassau, the smaller US-based subsidiary FTX.US was established to facilitate trades for US customers.
FTX.US – which is only a tiny player in the digital asset sector – remains operational at the time of writing, though speculation is mounting of a pending asset freeze.
US regulators are beginning to probe FTX.US’s lending activities, according to a Bloomberg report, and there is no doubt that customer confidence in anything FTX related has been irreversibly extinguished.
The fate of SBF is up in the air.
If criminal charges are filed, will he stay and face them, or follow in the footsteps of crypto pariahs Kyle Davies, Su Zhu and Do Kwon, who have been in hiding following the collapse of Three Arrows Capital and Terraform Labs?
SBF apologised for his failings in a recent Twitter thread, and he’s shown a willingness to work with third parties to resolve the crisis.
What’s going on with Tron?
On Thursday, FTX disclosed an agreement with Tron Foundation to allow holders of Tron’s TRX, BTT, JST, SUN, and HT tokens to withdraw them from the exchange.
FTX Announcement Regarding the Tron Credit Facility:
We are pleased to announce that we have reached an agreement with Tron to establish a special facility to allow holders of TRX, BTT, JST, SUN, and HT to swap assets from FTX 1:1 to external wallets.
— FTX (@FTX_Official) November 10, 2022
But this, too, has been met with controversy.
TRX is currently selling for US$0.35 on FTX, six times the fair market value of US$0.037, meaning that users will realise massive losses when selling on another exchange.
TRX is selling for 500% above fair market value on FTX – Source: ftx.com
This would also open up significant arbitrage opportunities for FTX given the 500% premium on TRX tokens.