The Bahamas regulator froze the accounts of FTX crypto exchange operator
Authorities explained their decision by the need to preserve the assets of the exchange, which faced a liquidity crisis
The Bahamas Securities Commission has frozen the funds of FTX Digital Markets, which is the operator of the FTX crypto exchange. The regulator attributed its decision to the need to preserve assets and stabilize the exchange facing a liquidity crisis, Bloomberg writes.
"The commission is familiar with the allegations that the funds were used inappropriately, managed inappropriately and / or transmitted to Alameda Research. According to the commission's information, such actions are... potentially illegal," the regulator said in a statement.
Bahamian authorities have appointed a temporary liquidator for the company. According to the agency, Sam Bankman-Fried, the CEO of FTX Trading (the parent company of FTX Digital Markets), is also being investigated by the U.S. Securities and Exchange Commission.
FTX had earlier approached U.S. cryptocurrency exchange Kraken about a potential deal that could save the company from collapse, Axios reported, citing unnamed sources familiar with the matter. The details of the appeal remain unknown for now.
Due to a significant liquidity crisis on the platform this past weekend, the head of FTX first turned to major cryptocurrency exchange Binance for help. However, after an audit of FTX's financial health, Binance backed out of the deal.