FTX, a cryptocurrency derivatives exchange, has reportedly filed a lawsuit against the Bahamian liquidators of a company formerly affiliated with it, claiming that the entity’s headquarters were in the United States. The lawsuit alleges that FTX US, which is not under liquidation, was the true headquarters of the company and that the Bahamian liquidators had no right to assert control over the assets of the US operations. The lawsuit is the latest development in a legal battle over the closure of the entity affiliated with FTX.
FTX US and Bahamian regulators are still caught in the middle of a legal battle to determine who should be responsible for the assets of FTX Digital Markets, the Bahamian subsidiary of the collapsed crypto exchange FTX. While Bahamian authorities have managed to seize some assets, legal proceedings in the US have stalled, and FTX US has filed a lawsuit against the Bahamian authorities in charge of liquidating FTX Digital Markets. The outcome of the lawsuit could lead to a greater recovery by US customers to the detriment of international customers.
FTX’s interim leader, John J Ray III, claims that FTX Digital Markets was nothing more than a shell corporation created to move money out of the reach of US regulators and courts. However, Bahamian regulators argue that FTX Digital Markets was the main center of the exchange’s operations, citing evidence that FTX moved its headquarters from Hong Kong to the Bahamas and had plans to move customer deposits to FTX Digital Markets. Despite an agreement to coordinate recovery efforts, the dispute over FTX Digital Markets’ importance continues.
In the meantime, customers who lost funds due to FTX’s collapse are left in limbo. It remains to be seen who will ultimately be responsible for compensating these customers, and to what extent they will be compensated.