No, Not The Luxury Villa! FTX's Bahamas Liquidators Want To Keep $200M Property

Even as the bankrupt cryptocurrency exchange FTX attempts to pay creditors in the U.S., the Bahamas liquidators are attempting to exclude more than $200 million in luxury properties from the estate of the country.

According to court records filed on Monday, lawyers for FTX CEO John Ray are attempting to thwart what they claim are "reckless" attempts by Bahamas-based administrators to gain access to the IT systems of the now-defunct exchange in legal proceedings that are quickly becoming as disorganized as the cryptocurrency exchange's own governance.

Unsuccessful attempts by former FTX CEO Sam Bankman-Fried to recover his password for company systems, allegedly at the behest of Bahamas joint provisional liquidators (JPLs), “highlight the recklessness with which the JPLs and the Bahamian authorities are approaching the security of the Debtors’ assets and systems,” a filing on behalf of FTX's new U.S. management said.

See Also: Canadian Regulator Gets Strict With Crypto Trading Platforms Following FTX Collapse

The statement also stated that “The last time these individuals had access to the Debtors’ systems, they used such access to transfer assets belonging to the Debtors,”

A temporary reopening of the FTX exchange between Nov. 10 and Nov. 11, the day Bankman-Fried quit and the business filed for bankruptcy, resulting in the withdrawal of $100 million in cryptocurrency by 1,500 customers who were, or claimed to be, Bahamians, according to the petition.

According to an email submitted to the court, Bankman-Fried had promised Bahamas Attorney General Ryan Pinder on Nov. 10 that he would set aside money for local customers and permit them to withdraw.

If they aren't promptly given access to FTX systems, such as Amazon Cloud and Google Drive, lawyers for the Bahamas liquidators warned of "potentially severe adverse impacts" and the likelihood of asset dissipation in a letter dated December 7.

FTX Owns 35 Luxury Properties

While attorneys argue over whether the country has jurisdiction, Bahamian liquidators claim in a separate court filing that the holding company of a collection of 35 opulent Bahamas villas, the most costly of which costs $30 million, was illegally transferred into U.S. hands.

The real estate holding company was allegedly under the control of both Bankman-Fried and co-CEO Ryan Salame.

Brian Simms, a liquidator appointed in the Bahamas, told the Delaware court that Salame may never have approved the real estate holding company's inclusion in Chapter 11 bankruptcy proceedings.

Simms ruled that when the assent of two directors is necessary, “an action of one director is a nullity under Bahamian law when the consent of two directors is required.”

“Bahamian law does not allow for recognition for a foreign insolvency proceeding of a Bahamian corporation" such as that which held the properties.

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