The Bahamas wants the US government to present back 35 different properties which are valued at greater than $256 million that were purchased by Sam Bankman-Fried’s cryptocurrency exchange FTX before it filed for Chapter 11 bankruptcy protection last month.
Attorneys representing the Bahamian government told a federal bankruptcy judge in Delaware that Bankman-Fried and Ryan Salame, who was his co-CEO on the time, amassed a large real estate portfolio throughout Latest Windfall island within the Bahamas.
The Bahamas representatives told the judge that it might be illegal under Bahamian law to permit US bankruptcy proceedings to manage the properties, based on CNBC.
The Bahamian government wants the judge to dismiss bankruptcy proceedings against an FTX subsidiary that’s listed because the owner of the properties.
“Bahamian law doesn’t allow recognition of a foreign insolvency proceeding for a Bahamian company,” the attorneys for the island nation told the judge.
But Bankman-Fried’s successor as CEO, John Ray, who was installed within the role to oversee the corporate’s bankruptcy restructuring, will likely resist any efforts by the Bahamian government to realize control over the assets.
Ray told the House Financial Services Committee on Tuesday that he’s looking for to get better greater than $7 billion in funds that may very well be returned to FTX investors — though the method is more likely to take weeks, if not months.
“At the tip of the day, we should not going to have the opportunity to get better all of the losses here,” Ray said on Tuesday.
“There was money spent that we are going to never get back.”
Bankman-Fried was arrested by Bahamian authorities on Monday evening on the request of the US government. He’s being held at a jail within the Bahamian capital of Nassau.
On Tuesday, federal prosecutors in Manhattan unsealed the indictment against Bankman-Fried, who faces charges of wire fraud, securities fraud and money laundering.
They allege that Bankman-Fried devised “a scheme and artifice to defraud” FTX’s customers and investors starting in 2019.
He diverted their money to cover expenses, debts and dangerous trades at his crypto hedge fund, Alameda Research, and to make lavish real estate purchases and enormous political donations, prosecutors said in a 13-page indictment.
If convicted, he faces a maximum of greater than 100 years in federal prison.
Bankman-Fried has said he’ll fight extradition to the US, though that may just delay the method by just a few weeks, based on legal experts.
Under Bankman-Fried’s watch, FTX spent lavishly on pricey real estate for each co-CEOs and other top executives at the corporate.
Bankman-Fried’s parents — Stanford University law professors Joseph Bankman and Barbara Fried — are listed because the owners of a $16 million luxury property that they used as a “vacation home.”
A spokesperson for the couple said they began the technique of returning the property to FTX before the corporate filed for bankruptcy.
