As Sam Bankman-Fried raced to raise as much as $8 billion to save FTX, the Bahamas securities regulator froze the assets of a portion of his crypto empire and moved to appoint a liquidator for one of his firms.
Bahamas Regulator Cracks the Whip
The action was taken against FTX Digital Markets, the FTX subsidiary in The Bahamas, on Thursday by the Securities Commission of The Bahamas. The regulation stated that a temporary liquidator must approve the transfer of any firm assets.
After being established in Hong Kong, FTX relocated to the Bahamas in 2021.
As some of his former investors wrote down their investments in FTX, Bankman-Fried was looking to raise up to $8 billion to save his cryptocurrency firm on Thursday.
BlockFi Pulls Out Despite Earlier FTX Bailout
BlockFi, a lending platform for digital assets, halted client withdrawals as a result of the crisis, which spread across the cryptocurrency industry.
BlockFi stated on Thursday that the “lack of clarity on the status” of FTX and Alameda prevented it from conducting business as usual.
The FTX CEO had bailed out BlockFi with a $250 million loan during a cryptocurrency market collapse this year.
The 30-year-old acknowledged through Twitter that there wasn’t enough easily available cash on the FTX trading platform to meet client needs.
The FTX Contagion Rages On
In light of growing skepticism regarding FTX’s ability to survive without a capital infusion and concern for clients who have money locked on the frozen exchange, the outcome of Bankman-Fried’s race for cash will determine the fate of the company.
FTX US, which is independent of the global exchange, announced it would stop trading on its platform in the next few days as a symptom of the mounting pressure on firms connected to him.
On Friday, FTX’s Australian operation was put into administration. Customers were urged not to make any transactions or deposits. Japan required the local affiliate of FTX to halt some of its operations.
Investors believe Bankman-Fried is requesting $6 billion to $8 billion. His trading company, Alameda Research, owes FTX $10 billion, according to people with knowledge of the situation.
Image Courtesy Of Shutterstock
