FTX seeking permission to sell Bahamas properties
FTX hopes to get permission from a Delaware bankruptcy court to sell $222 million in luxury real estate once owned by the collapsed cryptocurrency exchange, a Law360 article released Friday said.
A snippet of the article seen by Guardian Business explained that the sale of the property will be carried out under the recent agreement reached by FTX US debtors and Bahamian liquidators of FTX Digital Markets.
Last year, FTX Trading Ltd. sued former FTX Chief Executive Officer Sam Bankman-Fried, and former FTX executives Zixiao “Gary” Wang, Nishad Singh and Caroline Ellison for more than $1 billion in the US Bankruptcy Court of the District of Delaware, levelling 48 collective counts dealing with the misappropriation of FTX and Alameda funds against the quartet.
The lawsuit states that the almost $250 million in luxury real estate in The Bahamas that the group purchased was unnecessary for the company's operation.
FTX has operated from headquarters in Nassau since 2021 before filing for bankruptcy in the US last year.
The lawsuit documents the group’s purchase of luxury real estate in The Bahamas, decrying the purchases as immaterial to the operations of FTX.
“As has been widely reported, defendants caused the FTX Group to spend more than $243 million on real estate in The Bahamas, including multimillion-dollar luxury properties for defendants and their friends and families,” the court document explains.
“Defendants funded these real estate purchases from accounts that held commingled customer and corporate funds.
“Using these commingled funds, defendants caused the FTX Group to purchase more than 30 properties, including a $30 million, six-bedroom penthouse in the Albany resort community in The Bahamas, in January 2022.
“The property, known as the Orchid Penthouse, was home to Bankman-Fried, Wang, Singh and Ellison before the FTX Group’s collapse. This quarter of a billion in real estate was not necessary for the operations of the FTX Group, and conferring such largesse on defendants and their friends and families was done to the detriment of FTX Group.”
Last month, the Bahamian liquidators of Bahamas-based FTX Digital Markets and FTX’s US debtors reached a global settlement agreement after a months-long dispute over who has jurisdiction over FTX’s assets and access to the company’s data.
“The global settlement agreement is another critical milestone for the FTX debtors,” said John. J. Ray III, CEO and chief restructuring officer of the FTX debtors, in a statement.
“The unique challenges raised by the conflicting filings of the FTX debtors and FTX Digital Markets have been some of the toughest the team has faced.
“But we initially recognised that we have an overlapping constituency: FTX.com customers. I am thrilled to have achieved a settlement so clearly in customer interests, one that also respects the important role to be played by the joint official liquidators (JPLs) and The Bahamas in the global recovery effort.”
FTX, once one of the world’s largest cryptocurrency exchanges, was headquartered in The Bahamas when it collapsed just over a year ago.
In November 2022, allegations that its founder and CEO, Sam Bankman-Fried, had commingled FTX funds with his private hedge fund Alameda Research caused a “run on the bank”, with thousands of customers attempting to withdraw their money from FTX.
When FTX could not meet the demand, it was liquidated in The Bahamas and filed for Chapter 11 bankruptcy protection in the United States. FTX had various companies across the globe.
The filings caused a contentious dispute between the court-appointed joint provisional liquidators in The Bahamas, Brian C. Simms KC, Peter Greaves and Kevin Cambridge, and FTX US debtors.
The global settlement agreement, FTX US said, “reflects a novel and mutually beneficial solution to the complex cross-border legal issues raised by the circumstances of the collapse of the FTX group”.
The US debtors and the JPLs have agreed to “pool assets and coordinate the establishment of reserves and the timing and amount of distributions to ensure that FTX.com customers in both proceedings receive substantially identical relative distributions at substantially identical times”.
Under the agreement, FTX customers can have their claims reconciled in the Chapter 11 proceedings or the proceedings in The Bahamas.
In the agreement, customer claims for cash or digital assets will be valued in US dollars.
“FTX.com customers are cautioned that either court has not approved the global settlement agreement and may change materially,” FTX’s US debtors said.
FTX hopes to get permission from a Delaware bankruptcy court to sell $222 million in luxury real estate once owned by the collapsed cryptocurrency exchange, a Law360 article released Friday said.
A snippet of the article seen by Guardian Business explained that the sale of the property will be carried out under the recent agreement reached by FTX US debtors and Bahamian liquidators of FTX Digital Markets.
Last year, FTX Trading Ltd. sued former FTX Chief Executive Officer Sam Bankman-Fried, and former FTX executives Zixiao “Gary” Wang, Nishad Singh and Caroline Ellison for more than $1 billion in the US Bankruptcy Court of the District of Delaware, levelling 48 collective counts dealing with the misappropriation of FTX and Alameda funds against the quartet.
The lawsuit states that the almost $250 million in luxury real estate in The Bahamas that the group purchased was unnecessary for the company's operation.
FTX has operated from headquarters in Nassau since 2021 before filing for bankruptcy in the US last year.
The lawsuit documents the group’s purchase of luxury real estate in The Bahamas, decrying the purchases as immaterial to the operations of FTX.
“As has been widely reported, defendants caused the FTX Group to spend more than $243 million on real estate in The Bahamas, including multimillion-dollar luxury properties for defendants and their friends and families,” the court document explains.
“Defendants funded these real estate purchases from accounts that held commingled customer and corporate funds.
“Using these commingled funds, defendants caused the FTX Group to purchase more than 30 properties, including a $30 million, six-bedroom penthouse in the Albany resort community in The Bahamas, in January 2022.
“The property, known as the Orchid Penthouse, was home to Bankman-Fried, Wang, Singh and Ellison before the FTX Group’s collapse. This quarter of a billion in real estate was not necessary for the operations of the FTX Group, and conferring such largesse on defendants and their friends and families was done to the detriment of FTX Group.”
Last month, the Bahamian liquidators of Bahamas-based FTX Digital Markets and FTX’s US debtors reached a global settlement agreement after a months-long dispute over who has jurisdiction over FTX’s assets and access to the company’s data.
“The global settlement agreement is another critical milestone for the FTX debtors,” said John. J. Ray III, CEO and chief restructuring officer of the FTX debtors, in a statement.
“The unique challenges raised by the conflicting filings of the FTX debtors and FTX Digital Markets have been some of the toughest the team has faced.
“But we initially recognised that we have an overlapping constituency: FTX.com customers. I am thrilled to have achieved a settlement so clearly in customer interests, one that also respects the important role to be played by the joint official liquidators (JPLs) and The Bahamas in the global recovery effort.”
FTX, once one of the world’s largest cryptocurrency exchanges, was headquartered in The Bahamas when it collapsed just over a year ago.
In November 2022, allegations that its founder and CEO, Sam Bankman-Fried, had commingled FTX funds with his private hedge fund Alameda Research caused a “run on the bank”, with thousands of customers attempting to withdraw their money from FTX.
When FTX could not meet the demand, it was liquidated in The Bahamas and filed for Chapter 11 bankruptcy protection in the United States. FTX had various companies across the globe.
The filings caused a contentious dispute between the court-appointed joint provisional liquidators in The Bahamas, Brian C. Simms KC, Peter Greaves and Kevin Cambridge, and FTX US debtors.
The global settlement agreement, FTX US said, “reflects a novel and mutually beneficial solution to the complex cross-border legal issues raised by the circumstances of the collapse of the FTX group”.
The US debtors and the JPLs have agreed to “pool assets and coordinate the establishment of reserves and the timing and amount of distributions to ensure that FTX.com customers in both proceedings receive substantially identical relative distributions at substantially identical times”.
Under the agreement, FTX customers can have their claims reconciled in the Chapter 11 proceedings or the proceedings in The Bahamas.
In the agreement, customer claims for cash or digital assets will be valued in US dollars.
“FTX.com customers are cautioned that either court has not approved the global settlement agreement and may change materially,” FTX’s US debtors said.
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