FTX debtors dispute value of crypto in Bahamas seizure

By Wendy Van Sickle

Columbus, Ohio, Dec. 30 – FTX Trading Ltd. and its affiliated debtors provided information on their cryptocurrency in the control of the Securities Commission of the Bahamas in a news release on Friday.

On Nov. 12, after the commencement of the Chapter 11 cases of the debtors, cryptocurrency of theirs was transferred without their authorization, including approximately 195 million FTT, 1,938 ETH and other miscellaneous coins that do not have substantial value, according to the release, which states that Blockchain information shows this cryptocurrency is currently in a single digital wallet at Fireblocks.

Based on evidence in the possession of the debtors, on Nov. 12 the Bahamas Commission instructed founders Sam Bankman-Fried and Gary Wang to transfer digital assets to a Fireblocks wallet, according to the release.

The value of the cryptocurrency in this wallet at spot prices at the time of transfer was approximately $296 million, according to etherscan.io, assuming the entire amount of FTT could be sold at spot prices at the time. The value of the same cryptocurrency at spot prices as of 2 p.m. ET on Dec. 30 was approximately $167 million, on the same assumption, according to the release, which notes there can be no assurances such a large amount of FTT could be sold at spot prices, or at all.

The Bahamas Commission issued a press release earlier Friday stating that the cryptocurrency in their custody was worth more than $3.5 billion at the time of transfer, according to the FTX release, which said the press release did not identify the type of cryptocurrency seized or the valuation methodology.

In addition, the FTX debtors said they have informed the Bahamas Commission that none of Bankman-Fried, Wang or the Bahamas Commission had a right to take cryptocurrency of the FTX debtors and that the debtors will seek the return of the seized cryptocurrency to their Chapter 11 estates for the benefit of creditors. The Bahamas Commission regulated only FTX Digital Markets Ltd., a local service company in The Bahamas. FTX Digital Markets is not the owner or operator of the FTX.com exchange, or the owner or custodian of the cryptocurrency seized.

FTX has headquarters in The Bahamas. The company filed Chapter 11 bankruptcy on Nov. 11 under case number 22-11068.

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