FTX sues Bahamas liquidators of FTX Digital Markets
FTX managers have sued the operator of bankrupt exchange FTX Digital Markets and its Bahamian liquidators
US lawyers for the bankrupt exchange claim its Bahamas-registered operator is improperly claiming its assets, harming the platform's creditors
Bankrupt cryptocurrency exchange FTX has sued Bahamian company FTX Digital Markets and its liquidators, accusing them of improperly claiming the exchange's assets, The Block reports.
The FTX managers claimed in the lawsuit that cryptocurrency exchange operator FTX Digital Markets is claiming cryptocurrency and intellectual property rights to the FTX.com platform, but has no right to do so, as it was originally created "as a front for a conspiracy to defraud exchange customers".
Meanwhile, FTX Digital Markets claims in the lawsuit that it owns FTX.com property and that the ownership dispute should be resolved in the Bahamas. FTX's US bankruptcy administrators for their part claim that the Bahamian liquidators have inherited only a "corporate shell", which they are using to fight for the right to conduct bankruptcy proceedings in their jurisdiction, and these "frivolous" claims will harm FTX's customers and creditors.
FTX has been feuding with Bahamian authorities since it filed for protection from creditors on November 11.
On November 11, the Bahamas Securities Commission froze FTX Digital Markets' funds and the next day ordered that all FTX Digital Markets' digital assets be transferred to its wallet. The regulator's accounts hold the crypto platform's assets, which were worth more than $3.5bn at the date of the transfer.
In early December, Bahamian authorities sought to regain control of local real estate acquired by FTX executives, which is now being counted in the exchange's US bankruptcy proceedings. Bahamian regulators told a federal bankruptcy judge in Delaware that they could not allow a US court to dispose of the property, as it was administratively inefficient and would violate Bahamian law.
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