Embattling crypto exchange FTX got another strike when trying to ease some issues. The crypto firm tried to prioritize withdrawals for specific clients and under guidance from the Securities Commission of The Bahamas (SCB). Now it’s been reported that the agency has denied the request of the crypto exchange.
The Securities Commission of The Bahamas went on to Twitter and posted the media release noting the condemnation for FTX. The document stated that the commission did not direct, authorize or suggest FTX Digital Markets, Ltd. to make withdrawals available for Bahamian clients on priority.
The SBC’s statement came in the wake of response to the Tweet of FTX on 11th November stating that the crypto exchange started facilitating withdrawals to Bahamian clients by means of Bahamian HQ’s regulation and regulators.
Bahamian crypto exchange FTX has an enormous user base of about one million users who got affected by the instances that took place lately. On 9th November, crypto exchange halted the operations related to withdrawals which made customers seek different ways to anyhow withdraw their own funds locked over the platform. Most of the flurry is among the users within the Bahamas.
The customers are using various methods including purchasing non-fungible tokens (NFTs) from the Bahamian accounts and even to ask the exchange employees to change their resident country and make it a Bahamas based account.
Such users should keep the warning issued by the Bahamian commission that during the potential liquidation process of FTX, all the funds being allocated to the users could be taken back.
In the media release, SCB while citing such transactions that they would be treated as voidable preferences when its insolvency regime would get activated. This would lead to the clawing back of the funds belonging to customers in the Bahamas.
Furthermore, it stated the agency takes no notice of any type of treatment based upon the preference of any specific FTX Digital Markets Ltd. investor or client.
The SCB’s statements should be treated as crucial as they come soon following the freezing of assets belonging to the crypto exchange. Moreover, the agency also suspended its registration within the region. It also went on to diminish the powers of the company’s directors and executives and considered it as a necessary action to make FTX go through the provisional liquidation. It would be helping the company to preserve assets along with stabilizing the crypto exchange.
Source: https://www.thecoinrepublic.com/2022/11/13/no-direction-for-ftx-to-prioritize-bahamian-withdrawals-the-scb-denies/