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Reuters: FTX’s Bahamas Liquidators Question the Validity of US Bankruptcy

November 16, 2022

Liquidators for FTX Digital Markets, FTX’s Bahamas unit, filed a Chapter 15 petition asking a New York court to recognize its bankruptcy in the Bahamas. Last week, FTX and over 100 affiliates filed for bankruptcy in Delaware following the crash of the cryptocurrency exchange. FTX Digital Markets was the first to enter liquidation proceedings because securities regulators declared the company insolvent and revoked its license. According to Brian Simms, one of the liquidators, the US proceedings were not authorized under Bahamas law. Bankruptcy attorneys not involved with the case noted that Simms’ statements may indicate controversy over who takes the lead in the bankruptcy, or ensure that Simms’ work is not overridden by the Delaware bankruptcy proceedings. “Whether that suggests that they are going to attack the cases that were filed in Delaware or not, we don't know,” bankruptcy attorney Evan Jones said.

Reuters subscribers can read the full article here.