FTX Liquidators in Bahamas Move Case From New York to Delaware

Bahamian liquidators who had filed a case related to the bankruptcy of FTX in New York have agreed to transfer that case to Delaware, where the fallen crypto exchange had already filed for bankruptcy protection. 

The move by the court-appointed liquidators in the Bahamas came after FTX sought a court order to make them file their case in Delaware, CoinDesk reported Tuesday (Nov. 22). 

FTX Trading had filed for Chapter 11 bankruptcy protection in Delaware, while the court appointed liquidators in the Bahamas filed a Chapter 15 suit — which applies to cross-border insolvency — against Bahamas-based FTX Digital Markets in New York, according to the report. 

Earlier, the Bahamian liquidators had said that Bahamas-based FTX couldn’t file for bankruptcy in the United States, per the report. 

The report comes on the first day of FTX’s appearance in bankruptcy court and as new managers at the cryptocurrency exchange found that the company and its affiliates have $1.24 billion in cash — more than what debtors had previously identified. 

According to published reports, court filings show that advisory firm Alvarez & Marsal — assigned to unearth FTX’s assets — was able to locate “substantially higher cash balances” than expected. 

FTX said recently that it owes $1.45 billion to its top 10 creditors alone. 

On Nov. 15, the Securities Commission of the Bahamas, which is the lead authority in the country investigating FTX Digital Markets, FTX Trading, Alameda Research and other related entities that operated there, announced the appointment of the liquidators for FTX. 

“Given the magnitude, urgency and international implications of the unfolding events with regard to FTX, the commission recognized that it had to, and moved swiftly to use its regulatory powers under the Digital Assets and Registered Exchanges Act, 2020 (DARE Act) to further protect the interests of clients, creditors and other stakeholders globally of FTX Digital Markets Ltd. (FDM),” the commission said at the time.