The FTX failure is said to have sparked a major international legal dispute between the United States and the Commonwealth of the Bahamas.
The Bahamian government is reported to be working with former FTX CEO Sam Bankman-Fried to provide a new cryptocurrency to control the country’s government.
After FTX collapsed in November, Bahamian government officials allegedly instructed Bankman-Fried to create new digital assets worth “hundreds of millions of dollars”, FTX lawyers said in a court filing, Bloomberg reported on Dec. 1. 12. It was reported that the authorities also asked the former CEO of FTX to submit new tokens under the control of the island leaders. The report also suggests that Bahamian officials tried to help Bankman-Fried recover the key computer systems of the now-defunct FTX trading system. According to US prosecutors, Bahamian officials are “responsible for conducting unauthorized access” to the FTX system to gain control of digital assets under the supervision of US courts.
John J. Ray III, FTX’s new CEO and restructuring expert, allegedly discovered the new coin maker when he and his team tried to take control of FTX’s computer system, the report said. The prosecutors’ statement deepens the dispute between FTX restructuring officials in the United States and officials in the Bahamas. According to US prosecutors, the Bahamas divers have asked a US judge for access to FTX data controlled by US parties, including business data, email records, and other information. “This is a live access request, which will be provided to the Bahamian government and MM immediately,” the attorneys wrote in a filing on Tuesday.
To support their allegations of collusion between the Bahamian government and SBF, American prosecutors said that SBF opened the door to all Bahamian clients. On November 10, just one day before FTX filed for bankruptcy, the company said it had begun supporting Bahamian currency withdrawals, citing compliance with local laws. The event led to the outflow of millions of dollars of cryptocurrency from the exchange.
While the new report brings more allegations of close ties between FTX and government officials in the Bahamas, other reports also show that SBF also has ties to the US government. According to some reports, SBF spent about $40 million supporting Democrats during the 2021-2022 political cycle. Tesla CEO Elon Musk said SBF has donated more than $1 billion to Democratic candidates. This news comes shortly after SBF expressed interest in creating a new project to pay up to $50 billion to FTX creditors. The FTX developer was finally arrested in the Bahamas on December 12.
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