The new head of FTX has made a shocking revelation about what led to the collapse of the cryptocurrency exchange. The new boss accused former FTX CEO Sam Bankman-Fried of being responsible for hacking into the company's network hours after it filed for bankruptcy in the US.
Bahamian Government Ordered SBF to Hack FTX to Get Funds – Fake News or Fact?
As stated by insolvency expert, John J. Ray, the authorized access to the FTX platform saw the transfer of assets in other accounts, not under the control of the management of the cryptocurrency exchange.
Ray is a seasoned bankruptcy attorney who led the infamous bankruptcy case of energy company Enron. The expert managed to win the $ 23 billion bankruptcy case, sparked by a huge accounting scandal. Ray is now the new head of FTX and will bring his wealth of corporate finance experience with him to help move the struggling stock forward.
Similarly, in a court document filed by FTX's attorneys in the District of Delaware, the legal unit alleged that the Bahamian government directed unauthorized access to the cryptocurrency exchange system to move cryptocurrency assets belonging to debtors.
In a shocking disclosure by the stock counsel's counsel, presented to the court in verbal and text form, the Bahamian government ordered Bankman-Fried and his co-founder, Gary Wang, to transfer a significant portion of the debtors' assets . It is worth noting that FTX debtors are aware that the funds are in the custody of the Bahamian regulator through FireBlock (an institutional digital custodian company).
In a Reuters report on Thursday, the Securities Commission of the Bahamas (SCB) revealed that it has transferred all digital assets belonging to FTX Digital Markets (FDM) to an unnamed portfolio under its custody. The commission's statement indicates that it acted because it was an urgent regulatory move needed to protect the interests of FDM's stakeholders.
The arguments
Following the resignation of FTX's CEO and the exchange's bankruptcy filing on Nov. 11, the business plummeted, sending the cryptocurrency industry into a tailspin. As a result, FDM liquidators on Wednesday asked a Manhattan court to recognize bankruptcy filings filed in the Bahamas.
They added that they oppose the validity of the exchange's bankruptcy procedure already filed in the United States. However, FTX countered by asking that all disputes be handled within the jurisdiction of the courts in Delaware, where the company initially filed for Chapter 11 bankruptcy a week ago.
Meanwhile, the Delaware judge has set a new hearing date for Monday, Nov. 21 for the decision on the venue dispute.
Additionally, the new FTX chief executive left a dismissive comment on FTX's corporate governance under Bankman-Fried, describing it as the worst he has ever seen in a corporate context. Bankman-Fried reportedly used company funds to purchase several homes for staff in the Bahamas.
Ray noted that FTX management should have documented some purchases. The recent case marked the fall of FTX, which was valued at $32 billion at the start of the year.
