FTX's Bahamas Liquidators Question the Validity of U.S. Bankruptcy

Liquidators for FTX's Bahamas unit, FTX Digital Markets, have asked a New York City court to recognize its bankruptcy in the Bahamas, saying they "reject the validity" of the cryptocurrency exchange's U.S. bankruptcy proceedings, Saltwire reported. The Bahamas liquidators, who were appointed on Nov. 10 by the Securities Commission of the Bahamas, filed a chapter 15 petition late Tuesday in U.S. bankruptcy court in New York, asking the court to help them obtain records from FTX and block asset transfers to protect creditors of the Bahamas-based company. FTX and more than 100 affiliates filed for bankruptcy in Delaware on Nov. 11 in one of the highest-profile crypto blowups, leaving an estimated 1 million customers and other investors facing total losses in the billions of dollars. But Bahamas affiliate FTX Digital Markets entered liquidation proceedings first, after securities regulators there declared the company insolvent and revoked its license. The Bahamas liquidators said they were not seeking to dismiss the U.S. bankruptcy, but noted that their actions may "impact" the chapter 11 cases. One of the liquidators, Bahamas-based restructuring attorney Brian Simms, said in court documents filed with the petition that the U.S. proceedings were not authorized under Bahamas law. Read more.