Bahamian liquidators say ‘no’ to DOJ FTX examiner

there is an automatic stay in place, the seizures were permissible because they would be governed by the criminal and/or police or regulatory power exceptions to the automatic stay.”

The Bahamian liquidators are still in the process of applying for Chapter 15 recognition from the Delaware Bankruptcy Court - a move made easier by their co-operation agreement with Mr Ray. It is understood they will first seek to negotiate with the US Justice Department to regain control of the $143m before taking any other steps that could involve legal action in the US court system.

Tribune Business previously reported that FTX Digital Markets had more than $93m on deposit with

Silvergate Bank, an institution well-known for providing services to the crypto and digital assets industries, with the remaining near-$50m balance held at the 26th smallest bank in the US, Moonstone Bank.

The latter is headed by Jean Chalopin, also chairman of Lyford Cay-based Deltec Bank & Trust. The Bahamian bank has repeatedly denied any ties to Moonstone, asserting that the only connection is the common shareholdings of Mr Chalopin.

Meanwhile, the Bahamian liquidators argued that even if the Delaware bankruptcy court approves the Justice Departmentappointed trustee’s bid for an FTX examiner, their remit should be narrowed to restrict costs and prevent duplication of work with the multiple other ongoing investigations.

“While the joint provisional liquidators share the US trustee’s specific concerns articulated in the motion regarding the Chapter 11 debtors’ pre-petition conversions of customer funds, the US trustee has instead proposed an examiner with nearly unlimited investigatory powers that could cost the Chapter 11 debtors’ estates tens of millions of dollars for little or no benefit to the estates and their parties-in-interest,” the Bahamian trio asserted.

“Even were the motion more narrowly tailored to specific issues concerning admitted conversions of customer funds by the Chapter 11 debtors’ management, it is unclear whether the appointment of an examiner is even needed at this time. Numerous governmental entities and criminal prosecutors, Mr Ray and his team, and the official committee of unsecured creditors are all already investigating the very same conduct and will all, in one way or another, make their conclusions known.”

The Bahamian liquidators, seeking to protect FTX Digital Markets and its estate from unnecessary expense, added that if an examiner was appointed their probe should be limited to several months with a set budget, and the focus be restricted to identifying persons who knew of the crypto exchange’s misuse of customer funds.

They asserted it was “implausible” that only Sam Bankman-Fried, FTX’s principal, and his close circle of Caroline Ellison, Gary Wang and Nishad Singh, knew what was happening.

With the US Justice Department, Securities & Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) all having brought separate lawsuits and charges against Mr Bankman-Fried, the trio added: “Mr Ray and his team, the [creditors] committee, the DOJ, the SEC and the CFTC should be given the opportunity to conduct their investigations and report to the court, as they have been doing without the presence of an examiner..

“Second, any benefit that the appointment of an examiner might yield will be far outweighed by the incurrence of disproportionately high costs and expenses that could be imposed on the Chapter 11 debtors’ estates. Indeed, the very cases the US trustee seeks to draw a parallel to (for example, Lehman Brothers) illustrate why adding another team of professionals to be paid by the estate – particularly at such an early point in the Chapter 11 cases – could be imprudent.

“For example, the total examiner costs in the Lehman Brothers and Caesar’s Entertainment bankruptcies exceeded $59m and $34m, respectively. Given that the Chapter 11 debtors’ liquidity profile here remains uncertain by their own admission, it seems inappropriate to impose increased costs on the estates by appointing an examiner with unlimited scope and duration.”

The Bahamian liquidators, warning that the examiner’s appointment could “stall” progress in the Chapter 11 cases, added: “The joint provisional liquidators submit that the most prudent approach would be to allow the Chapter 11 debtors’ new management, the committee, the DOJ, the SEC, the CFTC and all other parties in interest to coordinate and conduct their own investigations of the Chapter 11 debtors’ prepetition conduct before any examination is commenced.”

NOTICE is hereby given that MARK STANLEY GODIN of East Street, New Providence, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 1st day of February, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

Notice

NOTICE is hereby given that

PIERRE-MARIE ALMONOR of Minnie Street, New Providence, The Bahamas, is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 1st day of February, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.

Notice

NOTICE is hereby given that

EDINA THARISSA LOUIS of Treasure Cay, Abaco, The Bahamas is applying to the Minister responsible for Nationality and Citizenship, for registration/naturalization as a citizen of The Bahamas, and that any person who knows any reason why registration/ naturalization should not be granted, should send a written and signed statement of the facts within twenty-eight days from the 1st day of February, 2023 to the Minister responsible for nationality and Citizenship, P.O. Box N-7147, Nassau, Bahamas.