A recent bankruptcy hearing has resulted in a federal judge rejecting a request to transfer control of embattled cryptocurrency exchange FTX’s $7.3 billion in disputed assets to the Bahamian judicial system.
The decision comes as a blow to Bahamian liquidators who had hoped to stake a claim on some of the assets. U.S.
Bankruptcy Judge John Dorsey firmly asserted his jurisdiction over the core issue of asset ownership, emphasizing that he would not defer it to a foreign court.
During the bankruptcy hearing at the U.S. Bankruptcy Court for the District of Delaware, the central point of contention revolved around the ownership of FTX’s substantial crypto and cash assets, valued at $7.3 billion.
The Bahamian liquidators argued that a judge from the Bahamas should oversee a portion of the bankruptcy case.
However, FTX’s restructuring advisors, who assumed control of the exchange following the arrest of its founder Sam Bankman-Fried on fraud charges, opposed the request.
Judge John Dorsey firmly dismissed the request, asserting that he would not defer a core jurisdictional issue to a foreign court.
He emphasized that the primary question at hand was determining the true owners of the assets in question. By retaining control over the case, the U.S. court system maintains authority over the disputed assets and their ultimate distribution.
With the denial of the request to transfer control, the Bahamian liquidators’ hopes of claiming a share of FTX’s assets have been dashed.
The decision reaffirms the jurisdiction of the U.S. Bankruptcy Court for the District of Delaware and signifies that the ownership dispute will be settled within the U.S. legal framework.
As the bankruptcy case progresses, further deliberations will address the allocation of FTX’s billions of dollars in crypto and cash assets.
