- On Friday, crypto exchange FTX filed a bankruptcy petition.
- FTX’s management intends to defend the case’s continuation in American courts.
The bankruptcy hearings for FTX have the potential to turn complex, so regulators in the Bahamas want to take over. In New York bankruptcy court on Tuesday, the exchange’s Bahamian subsidiary FTX Digital Markets Ltd. filed for chapter 15.
Legal counsel for the insolvency, Bahamas-based Brian Simms, said in the Chapter 15 petition that FTX did not have permission to file for bankruptcy in the United States and requested that the company’s assets in the United States be transferred to Bahamian liquidators.
U.S Law Offers Better Protection
On Wednesday, however, WJS reported, citing unnamed sources that FTX’s management intends to vigorously defend the case’s continuation in American courts. Companies from other nations typically seek to restructure their debt in the United States because U.S. law affords them better protection.
Given that FTX is comprised of over a hundred firms and it is believed that it will have over 1 million individual creditors, this new discovery reveals that the liquidation of the collapsed exchange, which went insolvent last week, might become tricky.
Sam Bankman-Fried, CEO of FTX, also ran the trading business Alameda Research, which failed as a result of utilizing exchange funds to place wagers. The problems began when a document was released that highlighted Alameda’s reliance on customer funding from FTX.
On Friday, FTX filed a bankruptcy petition. A short time later, the business reports that a hack caused millions of dollars in customer assets to vanish from the exchange. Several firms exposed to FTX stopped withdrawals and are facing a tough time.
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