Lawyers Say The Bahamas Told Bankman-fried To Make A New Cryptocurrency After The FTX Fell Apart

Lawyers for FTX Trading said in a court filing that before Sam Bankman-Fried was arrested on Monday, Bahamas government officials worked closely with him and tried to help him get back into key computer systems at FTX Trading, which had gone bankrupt.

According to the legal team in charge of FTX, before Bankman-Fried was banned from using FTX systems, the Bahamas asked him to mint new digital coins with a total value of hundreds of millions of dollars and then transfer control of those tokens to island officials. This happened before Bankman-Fried was banned from using FTX systems.

The claims increase a battle that is taking place between a group of restructuring executives from the United States who are attempting to recover FTX assets in order to repay creditors and officials from the Bahamas. Liquidators in the island nation have petitioned a judge in the United States for permission to access FTX data that is managed by their counterparts in the United States.

In a court filing submitted on Tuesday, American attorneys wrote that the request is for “live, dynamic access that would be provided immediately to the government of the Bahamas as well as to Messrs. Samuel Bankman-Fried and Gary Wang, who are located in the Bahamas and working closely with Bahamian officials.” Wang is one of the original founders of FTX.

The mail that was sent to Bankman-Fried and Wang seeking their comment was not immediately responded to. Following the filing of criminal charges against Bankman-Fried in the United States, he was taken into custody on Monday in the Bahamas.

Bahamas Withdrawals

In an attempt to paint a picture of cozy relations between Bankman-Fried and the authorities in the Bahamas, the US lawyers for the company pointed to an email sent by Bankman-Fried on November 9 — just days before the bankruptcy — in which he stated that he would be “more than happy” to open up withdrawals for all Bahamian customers, allowing them to be made whole. The email was referenced in an attempt to paint a picture of cozy relations between Bankman-Fried and the

According to the court documents, Bankman-Fried wrote that “it’s your call whether you want us to do this” but that “we are more than happy to and would consider it the very least of our duty to the country,” and that “we could open it up immediately if you reply saying you want us to.” “It’s your call whether you want us to do this. But we are more than happy to and would consider it the very least of our duty to the country.”

The following day, FTX’s US lawyers claim that there was a withdrawal of one hundred million dollars from the platform. The collapse of Bankman Fried’s crypto empire sparked inquiries on the part of federal prosecutors, regulatory agencies, and the team handling the bankruptcy for FTX.

Bankman-Fried gave up control of FTX to restructuring expert John J. Ray III and a team of lawyers and financial advisers who are scouring the company’s books in search of cash, cryptocurrency, and assets that could be sold to help repay creditors. Bankman-Fried gave up control of FTX to John J. Ray III and a team of lawyers and financial advisers because John J. Ray III and his team are better equipped to.

Lawyers Say The Bahamas Told Bankman-fried To Make A New Cryptocurrency After The FTX Fell Apart
Lawyers Say The Bahamas Told Bankman-fried To Make A New Cryptocurrency After The FTX Fell Apart

A few days after FTX filed for bankruptcy in Wilmington, Delaware, involving approximately 100 units, the company’s American restructuring team accused the Bahamian government of interfering with the reorganization process being undertaken in the United States. American lawyers said in a court filing that Bahamas officials are “responsible for directing unauthorized access” to FTX systems in order to get control of digital assets under the supervision of a US court. The lawyers cited social media posts and text messages from Bankman-Fried and others as evidence.

During the time that Ray and his crew were attempting to seize control of the computer systems that were used by FTX, they observed someone minting fresh coins. In the end, they came to the conclusion that Bankman-Fried and Wang were the ones behind it, and that they were acting at the request of the Bahamas.

The attorneys for FTX also expressed their displeasure with the legal strategies employed by liquidators in the Bahamas in an effort to broaden the extent of their jurisdiction beyond the single FTX entity that is in the process of being liquidated by a court in the Bahamas. The liquidators have requested that the judge in the United States compel their American counterparts to grant access to Bahamian lawyers to data pertaining to trading platforms, email records, and other material that is kept on FTX servers.

A request for comment made to a lawyer working for the liquidator in the Bahamas was not immediately met with a response. In addition, the two camps will face each other in federal court in January to argue about the appropriate level of deference that the US team should show to the proceedings taking place in the Bahamas.

The priority of a creditor’s obligation, not the creditor’s country, is taken into consideration in the bankruptcy courts of the United States. Once a final reorganization plan has been approved, a federal judge in the United States often has the authority to distribute all of the company’s assets when a multinational corporation files for bankruptcy in the United States. In certain instances, the assets of a corporation can be linked to the debt owing to overseas creditors in such a way that further insolvency cases must be brought outside of the United States.

If something like this occurs, international legal battles can stretch on for years, delaying payment to creditors. The case number is 22-11068 and it is being heard in the United States Bankruptcy Court for the District of Delaware.

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