Bahamas SCB Said New FTX CEO’s Latest Statements On Its Actions Were “Unfounded”

Key Points:

• In press releases and court filings by Securities Commission of The Bahamas, John J. Ray III, the representative of the FTX debtors residing in the United States, made major errors that required correction.
• According to the paperwork, the Chapter 11 Debtors had “publicly challenged” the Commission’s estimations of the value of digital assets moved to digital wallets under its management in November 2022.
• It claimed that these assertions were supported by incomplete material and that the debtors failed to exercise due diligence by contacting the Joint Provisional Liquidators for information.

The Securities Commission of The Bahamas (SCB) had to clarify major misstatements made by John J. Ray III, who took over as CEO of FTX when founder Sam Bankman-Fried resigned in November, in press releases and court papers, according to a statement made public on January 3.

According to the statement, during a court filing before the US House of Financial Services Committee, FTX CEO John J. Ray III made public statements asserting that the Commission had authorized FTX to mint a considerable amount of fresh tokens under “oath.”

The Chapter 11 Debtors had “publicly challenged” the Commission’s estimations of the value of digital assets moved to digital wallets under its management in November 2022, the statement said.

It claimed that these assertions were supported by incomplete”material and that the debtors failed to exercise due diligence by contacting the Joint Provisional Liquidators for information.

“The US Debtors’ continued lack of diligence when making public statement concerning the Commission is disappointing, and reflects a cavalier attitude towards the truth and towards The Bahamas that has been displayed by the current officers of the Chapter 11 Debtors from the date of their appointment by Sam Bankman-Fried,” the SCB said.

On December 30, the SCB disclosed that, as of November 12, it had held more than $3.5 billion in assets belonging to FTX customers. Later that day, FTX Trading and its associated debtors announced they would seek the restoration of that cryptocurrency to their Chapter 11 estates for the benefit of creditors, alleging the monies had been moved after bankruptcy procedures had begun.

Without offering any evidence to support their assertions, the Chapter 11 Debtors further claimed that the digital assets held in trust for FTX consumers and creditors by the Commission were “stolen.”

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