FTX Bahamas Unit Files for Chapter 15 Bankruptcy in New York

Nov 16, 2022


(Bloomberg) -- FTX Digital Markets Ltd., the Bahamas-based entity associated with Sam Bankman-Fried’s global digital asset empire, has filed for Chapter 15 bankruptcy protection. Chapter 15 filings are designed to facilitate corporate insolvencies that involve assets and entities that span more than one country. 

The filing by the Ryan Salame-helmed unit comes under the “foreign proceeding” law where the “assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation,” the company said in documents filed in the Southern District of New York court. “That will allow provisional liquidators who can act as foreign representatives a “broad discovery concerning the property and affairs of a debtor,” it said in the filing.

Read more: FTX.com Assets Frozen by Bahamas as Crisis Engulfs Empire (2)

The filing follows an abrupt petition by some 130 different Bankman-Fried and FTX-associated entities, including FTX Trading Ltd, for Chapter 11 bankruptcy protection earlier this month. 

FTX has over a million creditors and its restructuring team is engaged with “dozens” of regulatory authorities globally to secure customer accounts, court filings state. FTX Digital, a subsidiary of FTX Trading, allowed users to convert their fiat money into tokens and vice versa. 

The filing urged the New York bankruptcy court to approve the petition “recognizing the Bahamian Liquidation will assist the orderly administration of FTX Digital’s liquidation, consistent with the public policy of the United States that the Bankruptcy Code embodies.”

Read more: FTX’s Freefall Into Bankruptcy Shows Why Case File Is Empty

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