FTX’s U.S. judge promises to keep control of cryptocurrencies

09.06.2023

The federal judge overseeing bankrupt cryptocurrency company FTX has vowed to retain control of $7.3 billion in disputed assets, a potential setback for liquidators in the Bahamas who are trying to claim some of the money in a separate bankruptcy case for the island nation.

U.S. Bankruptcy Judge John Dorsey sided with restructuring consultants who took over FTX from its co-founder Sam Bankman-Fried, who faces federal fraud charges. The big question in U.S. bankruptcy is who is entitled to billions of dollars in cash and cryptocurrencies.

A liquidator in the Bahamas has asked Dorsey for permission to refer some legal questions to a Bahamian judge who is handling the bankruptcy case of one small unit of the FTX empire. FTX advisers say it is a backdoor attempt to seize assets in the U.S. and take the reorganization out of federal court in Wilmington, Delaware.

Dorsey said he would issue a final ruling on the liquidator’s request on June 9, when the company returns to court.

The liquidators of the Bahamas-based unit, known as FTX Digital Markets, claim the unit owns FTX.com property, the company said in court documents.

FTX Trading Ltd. case, 22-11068 U.S. Delaware County Bankruptcy Court.