US Judge Supports Control of FTX Assets in Bankruptcy Case
In a blow to liquidators in the Bahamas, the US federal judge presiding over the bankruptcy of crypto firm FTX has asserted his authority over $7.3 billion worth of disputed assets. This development poses a potential setback for the liquidators in their pursuit of claiming a portion of these funds in a separate insolvency case in the Bahamas.
Judge Dorsey Supports Restructuring Advisers and Questions Asset Ownership
US Bankruptcy Judge John Dorsey sided with the restructuring advisers who assumed control of FTX from its co-founder, Sam Bankman-Fried, who is facing federal fraud charges. A key point of contention in the US bankruptcy proceedings revolves around determining the rightful claimants to the substantial cash and cryptocurrency holdings. Judge Dorsey emphasized that he alone has access to these assets and stated his unequivocal refusal to delegate a core matter of the bankruptcy case to a foreign court.
Battle Over Legal Issues and Asset Grabbing
Liquidators in the Bahamas have requested permission from Judge Dorsey to present specific legal matters to a Bahamian judge overseeing the insolvency case of a minor division within the FTX empire. The advisers representing FTX argue that this maneuver is an attempt to gain control of assets in the US and shift the reorganization process away from the federal court in Wilmington, Delaware.
Final Ruling Awaited
The judge has announced that he will deliver his final ruling on the liquidators’ request on June 9, during the next court hearing for the company. At the heart of the matter, the liquidators for FTX Digital Markets, the Bahamas division, claim ownership of FTX.com’s assets, as stated in court documents.
The case is registered as FTX Trading Ltd., 22-11068, in the US Bankruptcy Court for the District of Delaware.