FTX, Bahamas Regulator Fight Over Control Of Bankruptcy Proceedings: WSJ

Securities regulators in the Bahamas are reportedly seeking to control FTX FTT/USD bankruptcy proceedings, challenging the company’s Chapter 11 filing in the U.S.

What Happened: On Nov. 15, FTX’s Bahamian subsidiary FTX Digital Markets Ltd., filed for Chapter 15 proceedings in New York to seek U.S. recognition of Bahamian liquidation proceedings. 

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According to a report by Wall Street Journal, FTX management is determined to keep the case in U.S. bankruptcy courts, citing people familiar with the matter. 

This is because foreign companies often desire to restructure debt in the U.S. because the country's laws provide more protection than other counties.

Brian Simms, the court-appointed Bahamian provisional liquidator, who is overseeing the bankruptcy proceedings of FTX Digital Market, has called into question the validity of FTX's U.S. bankruptcy filing.

FTX Digital Markets was founded by Sam Bankman-Fried in Hong Kong in May 2019, but after China's cryptocurrency ban in September 2021, he relocated the company to Nassau, the Bahamian capital.

The Bahamas' securities regulator did not immediately respond to Benzinga’s request for comment. 

Price Action: FTT is trading at $1.61, down 8.51% in the last 24 hours, according to Benzinga Pro.

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