Bahamas regulator contradicts FTX claim that it was required to process local withdrawals
Quick Take
- The Securities Commission of the Bahamas said it did not direct, authorize or suggest that FTX process Bahamian users’ withdrawals.
- SCB said funds withdrawn in the Bahamas may be “clawed back.”
The Securities Commission of the Bahamas (SCB) did not require failed crypto exchange FTX to allow withdrawals for users in the country, according to a statement shared on the financial regulator's Twitter account.
"The Commission wishes to advise that it has not directed, authorized or suggested to FTX Digital Markets Ltd. the prioritization of withdrawals for Bahamian clients," the SCB wrote, adding that "the Commission does not condone the preferential treatment of any investor or client of FTX Digital Markets Ltd. or otherwise."
The SCB's statement comes after FTX cited "Bahamian HQ's regulation and regulators " as the reason it facilitated withdrawals in the country.
Bahamian accounts that were able to withdraw their funds may not be entitled to keep them, the SCB added, stating that "such transactions may be characterized as voidable preferences under the insolvency regime and consequently result in clawing back funds from Bahamian customers."
FTX was one of the largest crypto exchanges by volume in the world before imploding and filing for Chapter 11 bankruptcy protection on Friday.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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