The provisional liquidator overseeing FTX Digital Markets’ bankruptcy proceedings says FTX was not authorized to file for bankruptcy in the United States without its permission.
Brian Simms, the court-appointed provisional liquidator overseeing FTX Digital Markets’ bankruptcy proceedings in the Bahamas, challenged the validity of the Chapter 11 bankruptcy filing of subsidiary FTX Trading and 134 other subsidiaries in a Delaware court on November 14.
In Nov. for a pending foreign bankruptcy proceeding.
In the filing, Simms notes that FTX Digital is not a party to the Delaware petition, saying that as provisional liquidator he is the only one “authorized to take any action, including, but not limited to, filing the Delaware petition.” , adding :
“The provisional liquidation order removes the directors of FTX Digital from the ability to act or exercise any function, for or on behalf of FTX Digital, unless expressly told in writing by me.”
The Bahamas-based lawyer argues that because he “did not authorize or approve, in writing or otherwise,” he denies the “validity of any alleged attempt to put FTX Affiliates in bankruptcy.”
Furthermore, he notes, “The entire FTX brand was ultimately operated from a single location: the Bahamas. All central administrative personnel were also located in the Bahamas.
The FTX Digital Asset Exchange was founded in May 2019 by Sam Bankman-Fried (SBF) in Hong Kong, but after China’s crypto ban, SBF moved the company to Nassau, the capital of the Bahamas, in September. from 2021.
Simms did not ask the court to dismiss the U.S. bankruptcy proceedings, saying that “no order of bankruptcy or discharge from Chapter 11 is being sought at this time,” but requests that the U.S. courts. The United States recognizes the lawful actions taking place in the Bahamas.
However, he noted that “it is conceivable that FTX affiliates that have filed for Chapter 11 would be affected by the requested interim relief,” according to his filing.
Related: FTX’s Ongoing Saga: Everything That Has Happened So Far
Businesses use Chapter 11 to help them reorganize their debts and pay creditors while continuing to operate.
The appointment of interim liquidators followed the Bahamian Securities Regulator suspending FTX’s registration status and freezing the assets of its local subsidiary on 10 November.