(Bloomberg) -- The federal judge overseeing the bankrupt crypto firm FTX vowed to retain control over $7.3 billion in disputed assets, a potential setback for liquidators in the Bahamas seeking to claim to some of the money as part of a separate insolvency case on the island nation.
US Bankruptcy Judge John Dorsey sided with the restructuring advisers who took over FTX from its co-founder Sam Bankman-Fried, who faces federal fraud charges. A central question in the US bankruptcy is who has a claim on billions of dollars in cash and crypto coins, Dorsey said.
“Under no circumstances would I ever defer a core” issue in the bankruptcy case to a foreign court, Dorsey said. “Only I have access to the assets.”
A liquidator in the Bahamas has asked Dorsey for permission to bring certain legal issues before a Bahamian judge who is overseeing the insolvency case of one small unit of the FTX empire. Advisers to FTX claim that is a back-door attempt to grab assets in the US and move the reorganization out of a federal court in Wilmington, Delaware.
Dorsey said he would make a final ruling on the liquidator’s request on June 9, when the company returns to court.
Liquidators for the Bahamas division — which is known as FTX Digital Markets — have argued that the unit owns FTX.com’s property, the company said in court papers.
The case is FTX Trading Ltd., 22-11068, US. Bankruptcy Court for the District of Delaware.
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