Bahamas authorities have seized $3.5 billion in digital assets belonging to cryptocurrency platform FTX Digital Markets (FTX) shortly after it filed for Chapter 11 bankruptcy protection based on information provided by founder Bankman Fred, according to a statement released on the 29th. Dec.

The Bahamas Securities Commission has seized FTX’s digital assets, effective November 12. In a statement, the authority noted the risk of “imminent squandering” of assets. Bankman Fred had pointed to fears, including cyber-attacks against the stock exchange.
According to bankruptcy filings, the company said $372 million worth of cryptocurrency was stolen within hours after FTX filed its application.
FTX saw about $700 million worth of token exits in 24 hours, according to blockchain analytics research firm Nansen.
The regulator said the digital assets are temporarily under its “exclusive control” until the country’s supreme court allows the regulator to return them to customers, creditors who own them, or parties to liquidation.
That could provide relief to some FTX clients after its current chief executive John J. Ray III, who is overseeing the restructuring, warned that international clients could lose more money than their US counterparts.
Bahamas authorities are examining the network of relationships between bankrupt FTX.com, registered locally as FTX Digital Markets, and its trading firm, Alameda Research.
The US Department of Justice has launched a criminal investigation into the stolen assets, as well as the fraud case it has filed against Fred Bankman, according to Bloomberg News.
The Bahamas Supreme Court has proposed that the (US) Securities Commission legally assist in sharing information related to FTX’s digital assets with US debtors and their representatives, the regulator added.