FTX sues its Bahamian liquidators for taking control of ‘millions of dollars’
Crypto exchange FTX has filed a lawsuit against the liquidators of its Bahamian affiliate, FTX Bahamas Ltd, claiming that they have wrongfully taken control of millions of dollars worth of digital assets, including bitcoin (BTC) and ethereum (ETH).
According to Reuters, the lawsuit was filed in the US court for the Southern District of New York. FTX is seeking the return of the digital assets and damages for the alleged mismanagement of FTX Bahamas’ assets. FTX also alleges that the liquidators have failed to properly account for the assets, which is required under Bahamian law.
“FTX Bahamas Ltd was a separate legal entity from FTX Trading Ltd, and FTX has always maintained ownership and control of its cryptocurrency exchange. The liquidators’ actions have caused significant harm to FTX and its reputation,”FTX statement reads.
FTX’s Bahamian affiliate filed for liquidation in July 2022, citing financial difficulties. However, FTX claims it was not adequately informed of the liquidation proceedings and that the liquidators have wrongly claimed ownership of FTX.
The lawsuit comes as the cryptocurrency industry faces increased scrutiny from regulators and financial institutions. FTX has been among the most active players in the space, securing a $450 million funding round at a valuation of $32 billion several months before the crash in November 2022.
Sam Bankman-Fried, a former FTX CEO, was charged with violating the Foreign Corrupt Practices Act (FCPA), conspiracy to commit money laundering, and other issues. was released on a $20 million bail, believed to be the highest ever set in a U.S. criminal case. He has denied the allegations and has pledged to fight the charges in court.