The Bahamas Freeze FTX.com Assets, Japan Halts Local Operation

The financial market regulator of the Bahamas has frozen the assets of “FTX Digital Markets and related parties” following the stunning collapse of Sam Bankman-Fried’s cryptocurrency exchange Cryptocurrency Exchange A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f A cryptocurrency exchange is an online platform that supports the exchange of various currencies for a cryptocurrency or digital asset.Comparable to a generalized financial exchange, a crypto exchange’s core function is to permit and encourage the buying and selling of cryptos.This is accomplished by producing a stable trading environment suitable for traders nested through different locations around the world. Sometimes a crypto exchange may be referred to as a digital currency exchange (DCE) f Read this Term, FTX.com.

In a press release on Thursday, the Securities Commission of the Bahamas called the move a “prudent course of action” to “preserve assets and stabilize the company.” The regulator also appointed a provisional liquidator.

FTX Digital Markets is the Bahamian subsidiary of FTX Trading and operates as the global crypto trading platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term, FTX.com. The exchange is headquartered in the Bahamas, but it is a separate entity from the US-based FTX.US, which, at the moment, is not affected by the troubled FTX.com.

“The commission is aware of public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research. Based on the commission’s information, any such actions would have been contrary to normal governance, without client consent and potentially unlawful,” the Bahamian regulator stated.

The troubles of FTX.com started last weekend, and the exchange is now on the brink of collapse. Though rival Binance initially offered to acquire FTX fully, it backed out within a day, citing “reports regarding mishandled customer funds and alleged US agency investigations.”

Now, the exchange needs to cover a shortfall of $8 billion and is not processing the majority of withdrawal requests. Bankman-Fried is now opting to raise capital.

Crackdown by Japan

Meanwhile, the Bahamas is not the only regulator to take direct action against FTX. Japan’s Kanto Local Finance Bureau also ordered the local subsidiary of FTX to suspend operations until 9 December. Additionally, the Asian regulator asked the exchange to submit a business improvement plan by 16 November.

Japanese regulations mandate that crypto exchanges must separate client funds from their own assets. However, the suspension of withdrawals by FTX shows that it did not follow all the necessary domestic requirements.

“We need to do everything possible to protect the interests of FTX Japan’s users,” Japan’s Finance Minister, Shunichi Suzuki said on a Friday news briefing. “It is extremely regrettable that the situation has come to this.”

In the United States, there are reports of the Securities and Exchange Commission and the Department of Justice opening an investigation against the troubled cryptocurrency exchange. However, those actions have yet to be officially confirmed.