$300m of FTX debtors transferred without authorization

• This cryptocurrency is currently held in a single digital wallet at Fireblocks
• The Bahamas Commission instructed Sam Bankman-Fried to transfer the funds to this wallet

FTX debtors (FTX Trading Ltd. and affiliates) published information on their cryptocurrency in the control of the Bahamas Commission (Securities Commission of the Bahamas). 

After the chapter 11 bankruptcy case commenced on November 12, 2022, digital assets of the FTX debtors worth just under 200 million FTT were transferred without their authorization, as well as around 1,938 ether. 

Crypto held in a single Fireblocks wallet 

According to blockchain data, this cryptocurrency is currently held in a single digital wallet at Fireblocks. The Bahamas Commission instructed Sam Bankman-Fried to transfer the funds to this wallet on November 12. The Commission admitted to arranging these transfers.  

At the time of the transfer, the value of the crypto in this Fireblocks wallet was just under $300 million at spot prices according to etherscan.io, if one assumes the whole amount of FTT could be sold at spot prices then. This value had dropped to around $167 million on December 30. Such a large amount of FTT won’t necessarily be sold at spot prices, if at all.

Debtors to seek return of seized crypto 

The FTX Debtors informed the Bahamas Commission that no entity had been authorized by them to take the cryptocurrency. The debtors will request the return of the seized cryptocurrency for the creditors’ benefit to their chapter 11 estates promptly. 

The Bahamas Commission was only responsible for regulating FTX DM (FTX Digital Markets Ltd.), a local service company on the islands. This company neither owns nor operates the FTX exchange or owns or holds custody of the crypto seized.