New legal proceedings filed by lawyers for the leadership of the failed cryptocurrency exchange FTX, have revealed Bahamian liquidators assigned to the FTX case have been trying to exclude over $200 million in luxury properties from FTX’s estate, as FTX has been attempting to wind up and repay its US creditors.

As the legal proceedings have grown increasingly messy, lawyers working for the new CEO of FTX have called the Bahamas-based administrators “reckless” in filings, noting they have tried to gain access to the defunct exchanges IT systems, which would allow them to transfer assets of customers.

Even former FTX CEO Sam Bankman-Fried has attempted to regain his password to access company systems at the urging of the local administrators, Bahamas joint provisional liquidators (JPL). Lawyers for FTX have said such attempts, “highlight the recklessness with which the JPLs and the Bahamian authorities are approaching the security of the Debtors’ assets and systems.”

The filing went on to note, “The last time these individuals had access to the Debtors’ systems, they used such access to transfer assets belonging to the Debtors.”

During November 10th and 11th, on the days Bankman-Fried resigned and the company filed for bankruptcy protection, the FTX exchange was briefly reopened and $100 million in cryptocurrency was withdrawn by 1,500 customers who were, or claimed to be Bahamian, according to the filing.

On November 10th, Bankman Fried made a promise to Bahamas Attorney General Ryan Pinder to segregate the funds of Bahamian customers and allow them to withdraw their assets, according to an email included in the filing.

Meanwhile in a letter filed on December 7th, the lawyers representing Bahamian liquidators said there would be “potentially severe adverse impacts,” and that assets would be at risk of dissipation if the liquidators were not immediately granted access to FTX’s IT systems, such as Amazon Cloud and Google Drive.

In another court filing, the lawyers for the liquidators argued that the holding company which held 35 luxury Bahamian properties, the most expensive of which was worth $30 million, had been unlawfully transferred to US control, while the lawyers argue over which country has rightful jurisdiction over the matter.

The portfolio of properties was supposedly jointly controlled by both FTX CEO Sam Bankman-Fried, and co-Chief Executive Ryan Salame. However now it is argued Salame never approved the inclusion of the real estate portfolio in the Chapter 11 proceedings, according to Brian Simms, a liquidator appointed in the Bahamas, in another filing.

Simms said, “An action of one director is a nullity under Bahamian law when the consent of two directors is required. Bahamian law does not allow for recognition for a foreign insolvency proceeding of a Bahamian corporation” such as the one that owned the properties.

The new CEO of FTX, John Ray, has told the court that FTX is among the biggest governance failures he has seen in his 40 year career restructuring failed enterprises. Ray noted there was a failure to document the structure of more than 100 entities which Bankman-Fried had overseen, as well as the staff on his payroll, or the legal status of properties given to the staff.

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