Geopolitics of justice – The character international of the case FTX has a serious tendency to complicate the task of justice american. During the first hearing last Tuesdaythem lawyers of the bankrupt platform had made some implied about the management of the securities commission in the Bahamas (SCB) where a significant entity of FTX. And the regulator of the small island state does not intend to let it go in this story which suddenly puts it under the spotlight of the whole world. Decryption.
Subtleties of U.S. bankruptcy law in sprawling FTX filing
Learn about bankruptcy proceedings FTXit is first of all to consider the operation of the justice American. You are now familiar with the famous chapter 11 of the bankruptcy law which allows a company in difficulty to put itself under the guardianship a US court to manage the repayment of his debts. Today we are going to discover the chapter 15 of this same bankruptcy law.
It gives the possibility to a foreign company subject to bankruptcy proceedings in its country oforiginto ask a federal judge to freeze all of its assets in the floor American. This is to prevent their seizure by foreign creditors. And that’s where it comes in FTX Digital Market Ltd. (FDM), the Bahamian entity of FTX.
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Agreements on the transfer of the file to Delaware
A quick reminder of the events: from the November 10the SCB suspends the activities of FDM in the country and places the company in liquidation provisional under the authority of the Supreme Court of the Bahamas. Then the November 12in some confusion, the SCB again requests the Supreme Court to proceed with a “ withdrawal » platform digital assets. Finally, the November 15the local liquidators will request the placement of FDM under the chapter 15 bankruptcy law with the Southern District Court of New York.
But on his side, FTX Trading Ltdthe entity main of FTX in the United States, had already filed, the November 11than application for bankruptcy under the chapter 11 bankruptcy law, but in the Delaware. So there was of them separate cases filed in two different jurisdictions. Finally, it’s the November 22i.e. the same day of the first audience in the file, that the two parties have agreed to bring together all proceedings under the authority of the Court of Wilmington in the Delaware.
Disagreements over the presentation of the facts by FTX’s lawyers
And while everyone seemed to agree on the procedure, the statements FTX lawyers at Tuesday’s hearing came to set fire to the powder with implied clearly poorly accepted by the Bahamian regulator:
“There is credible evidence that the Bahamian government is responsible for ordering unauthorized access to the systems [informatiques] debtors [FTX Digital Market] in order to obtain their digital assets, and this, after the initiation of the procedure. This raises serious questions about compliance with Chapter 15.”
scathing response from the SCB by press release which refers to the testimonies of the FTX teams:
“It is concerning that Chapter 11 debtors [ FTX Trading Ltd] have chosen to rely on the statements of individuals whom they have, in other documents, characterized as unreliable and potentially seriously compromised sources of information. »
SCB goes on to also accuse John Ray, the new CEO of FTX, of having “ misrepresented the timely action of the commission with untimely and inaccurate allegations”. Before concluding that given the revelations about Sam Bankman-Fried and his teams, the Bahamian authorities did very well to urgently withdraw the funds still available on the platform to guarantee their safety. On this point, it is difficult to prove the regulator of the Caribbean archipelago wrong as the management of SBF appears more disastrous every day.
The bankruptcy of FTX is there to remind us that we must remain cautious in this still very young ecosystem. Get into the habit of healthy distrust. Join AscendEX, because by performing very simple daily tasks, you will receive satoshis from bitcoin mining directly on your wallet. And to start well, 10,000 Satoshis as a registration bonus thanks to our link (commercial link).