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Semafor LogoLiz Hoffman and Karina Tsui
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FTX accuses Bahamian government of directing unauthorized transfer

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Karina Tsui is a Breaking News reporter at Semafor. You can reach her at ktsui@semafor.com

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Bankrupt crypto exchange FTX says it has “credible evidence” that its since-fired CEO, Sam Bankman-Fried, transferred money out the firm in recent days at the behest of the government of the Bahamas, where it is based.

In a new court filing, FTX cited text messages between Bankman-Fried and FTX cofounder Gary Wang that say that “Bahamian regulators” instructed funds under the government’s control to be transferred – after the company had filed for bankruptcy.

REUTERS/Dado Ruvic/Illustration


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That’s not supposed to happen. Bankruptcy proceedings freeze a company’s assets while a court works out how much money is left and to whom it’s owed. FTX’s concern is that what little remains at the company – money that might go to make customers whole – is being siphoned off.

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An FTX employee tweeted last week that “Per our Bahamian HQ's regulation and regulators, we have begun to facilitate withdrawals of Bahamian funds. As such, you may have seen some withdrawals processed by FTX recently as we complied with the regulators.”

The Bahamian securities regulator quickly denied it.

In a media release issued by the Securities Commission in the Bahamas on Saturday, regulators said that “the Commission wishes to advise that it has not directed, authorized or suggested to FTX Digital Markets Ltd. the prioritization of withdrawals for Bahamian clients.”

“The Commission further notes that such transactions may be characterized as voidable preferences under the insolvency regime and consequently result in clawing back funds from Bahamian customers. In any event, the Commission does not condone the preferential treatment of any investor or client of FTX Digital Markets Ltd. or otherwise.”

This is a developing story. Please check back soon for updates.

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