Blockchain & Crypto

Bahamian Authorities Say FTX’s US Bankruptcy Filing Is Invalid

The provisional liquidator overseeing the FTX Digital Markets bankruptcy proceedings in the Bahamas claims FTX cannot file for bankruptcy in the US without his approval

FTX bankruptcy

Bahamian Authorities Say FTX’s US Bankruptcy Filing Is Invalid. Source: pixabay.com

Brian Simms, the provisional liquidator appointed by the court to oversee bankruptcy proceedings of FTX Digital Markets in the Bahamas, has questioned the validity of a Chapter 11 bankruptcy filing by the FTX Trading subsidiary and 134 other affiliates in a Delaware court.

In addition, Simms filed for Chapter 15 Bankruptcy in the US Bankruptcy Court in the Southern District of New York. The procedure is typically used when a foreign representative of the debtor seeks recognition in the US in case of foreign insolvency proceedings.

The filing notes that FTX Digital is not part of the Delaware Petition. Besides, it stresses the role of Simms as a single provisional liquidator “authorized to take any act including, but not limited to, filing the Delaware Petition”. Therefore, previous attempts to place FTX Affiliates in bankruptcy are not valid without his approval. 

FTX’s crypto exchange was founded in 2019 by Sam Bankman-Fried (SBF) in Hong Kong. However, following China’s crypto ban, SBF relocated the company to the Bahamas in 2021. That’s why Simms duly notes, “The entire FTX Brand was ultimately operated from a single location: The Bahamas. All core management personnel likewise were located in The Bahamas.”

Thus, the provisional liquidator requests the US courts to recognise legal actions taking place in the Bahamas. At the same time, Simms has not asked the court to dismiss the U.S. bankruptcy proceedings so far.

SEE ALSO:

FTX Hacker Has Become the Ethereum Whale

VCs contributed $14.2B to the crypto industry in H1 2022, but investment pace is slowing – KPMG

Marketing Strategies to Boost Your Crypto Project’s Growth

Nina Bobro

1428 Posts 0 Comments

https://payspacemagazine.com/

Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.