US officials overseeing the bankruptcy process of FTX have agreed to co-ordinate with liquidators winding down the cryptocurrency exchange's operations in the Bahamas, resolving a dispute that threatened the recovery of what could be billions of dollars in funds.
In a joint statement on Friday, the sides said they will work to share information, secure property and co-ordinate litigation against third parties.
FTX’s US bankruptcy team has been at odds with Bahamian officials since November, when competing bankruptcies were filed in the two countries.
The Securities Commission of the Bahamas began liquidation proceedings on November 10 against FTX Digital Markets, the company's Bahamas-based unit.
The next day a US Chapter 11 proceeding was filed in Delaware, which included more than 100 FTX entities including FTX Trading and cryptocurrency hedge fund Alameda Research.
Bahamian regulators have seized FTX assets, which officials said was meant to safeguard assets that will ultimately be returned to creditors of FTX Digital Markets.
John Ray, who took control of FTX after founder Sam Bankman-Fried resigned in November, had accused Bahamas-based liquidators of colluding with the disgraced founder to undermine the US bankruptcy case and shift assets to the Bahamas.
Mr Ray’s lawyers had refused the liquidators’ demand for access to internal systems and Slack and email accounts, saying they “did not trust” the Bahamians with information that could be used to siphon assets away from the US bankruptcy team.
Bahamian securities regulators accused Mr Ray of displaying “a cavalier attitude towards the truth” in his statements about the Bahamian asset seizures.
The US team has also disputed the size of the Bahamian assets that were seized, saying they were worth $296 million in November, not $3.5 billion as the liquidators estimated. Friday's statement said the US team was now comfortable the assets were appropriately safeguarded.
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Former FTX chief executive Sam Bankman-Fried arrives on the day of his hearing at Manhattan federal court in New York. Reuters -
Mr Bankman-Fried faces fraud charges over the collapse of the FTX cryptocurrency exchange. AP -
Mr Bankman-Fried pleaded not guilty to charges that he cheated investors and looted customer deposits on his cryptocurrency trading platform. EPA -
Mr Bankman-Fried is facing federal charges that he illegally used money from investors for personal gain. Reuters -
The FTX Group has installed a new chief executive as Mr Bankman-Fried deals with his legal challenges. Reuters -
Mr Bankman-Fried was extradited to the US from the Bahamas in December. AP -
The FTX Group has filed for bankruptcy and has begun an 'orderly process to review and monetise assets for the benefit of all global stakeholders'. AFP -
Mr Bankman-Fried was arrested on December 13, 2022, in the Bahamas after being served with several US criminal charges. AFP -
Mr Bankman-Fried lost much of his wealth in the FTX collapse. AP -
The US accuses Mr Bankman-Fried of committing one of the biggest financial frauds in history. Reuters -
Mr Bankman-Fried, seen here in February 2021, has testified on Capitol Hill about cryptocurrency policy. AFP
Mr Ray said there were still some issues to be worked out in the agreement with the liquidators from the Bahamas. Friday's statement said details of the agreement would be filed "shortly" with the US Bankruptcy Court in Delaware.
Mr Ray, a liquidator and lawyers for the liquidators did not respond to a request for comment.
Mr Bankman-Fried was arrested on fraud charges and pleaded not guilty on January 3. Mr Ray has said the exchange lost $8 billion of customer money, and added the bankruptcy team is focused on recovering assets to repay creditors.
