Securities Commission of Bahamas Seizes $3.5 Billion in FTX Customer Assets to Protect from Dissipation

• The Securities Commission of the Bahamas is temporarily holding $3.5 billion in FTX customer assets until the Bahamas Supreme Court orders it to return the funds.
• The assets were given to the commission on Nov.12 after FTX and its affiliates filed for bankruptcy.
• The commission seized the assets to protect them from potential dissipation that would be detrimental to FTX’s clients and creditors.

The Securities Commission of the Bahamas has made headlines recently as it announced that it has taken possession of more than $3.5 billion in FTX customer assets. This decision was taken on November 12th, 2022, just after FTX, an exchange based in the Bahamas, filed for bankruptcy along with its affiliates. The announcement was made late Thursday, December 29th, 2022.

The commission was temporarily holding the digital assets until the Bahamas Supreme Court orders it to return the funds to customers and creditors, or the liquidation administrator. This decision was taken due to the theft of at least $372 million worth of crypto during a cyberattack on the defunct exchange. The commission feared that if these digital assets were not taken into custody, they could be subject to potential dissipation, which would be detrimental to FTX’s clients and creditors.

The Securities Commission of the Bahamas took a step towards protecting FTX customers’ assets and making sure that the funds are not misused. They sought and received a court injunction to protect digital assets while exercising its regulatory authority. The funds are now out of the reach of Bankman-Fried, former CTO and co-founder of FTX Gary Wang and anyone else associated with FTX.

The Commission is currently reviewing the customer assets to ensure that all the funds are accounted for. They are also looking into other fraudulent activities that may have taken place during FTX’s operations. The Commission is expected to issue further updates as the investigation progresses.

SEC’s Action Saves Coinbase From Crypto Lending Crisis

• The SEC blocked Coinbase from launching its Lend product in 2021, which probably saved the exchange from a possible crisis.
• Co-founder of Three Arrows Capital, Zhu Su, believes that the SEC’s action saved Coinbase from big trouble.
• In June 2021, Coinbase announced plans to launch a program called Lend, which would enable users to earn a 4% annual percentage yield (APY).

Coinbase, one of the world’s leading digital currency exchanges, was saved from a possible crypto lending crisis by the US Securities and Exchange Commission (SEC) in 2021. This was the opinion of the Co-founder of now-bankrupt crypto hedge fund Three Arrows Capital, Zhu Su, who believes that the SEC’s refusal to allow Coinbase to launch its Lend product saved the exchange from being entangled in the ongoing market contagion.

The story began in June 2021, when Coinbase announced plans to launch a program called Lend, which would enable users in the United States, except for New York and Hawaii, to earn a 4% annual percentage yield (APY) when they lend their USDC. The program was seen as a way for Coinbase to diversify its services and expand into the lending market.

However, in September 2021, Coinbase revealed that the company had received a Wells notice from the SEC, indicating that the securities regulator was looking to sue Coinbase if the crypto exchange went ahead with launching the Lend program. This took Coinbase by surprise, as the exchange had been in talks with the regulator for nearly six months. According to a blog post by the firm’s chief legal officer, Paul Grewal, the SEC did not provide any concrete reason for its action and stated that the product launch would be on hold till October.

It was this action that Zhu Su believes saved Coinbase from a potential crisis, as the SEC’s refusal to let the company launch the Lend product prevented it from becoming entangled in the market contagion. In the current market environment, many exchanges have been struggling due to the increased volatility and lack of liquidity, and Zhu Su believes that Coinbase would have been in a similar situation had it gone ahead with the product launch.

Coinbase remains an extremely popular exchange, and its decision to pause the launch of the Lend product was certainly a wise move. The exchange’s decision to comply with the SEC’s ruling may have saved it from a potentially disastrous situation and has given it the opportunity to continue to provide its services to its users.

Bitcoin (BTC) May Be Trading as an Unregistered Security: What Does This Mean?

• Former SEC attorney John Reed Stark believes that Bitcoin (BTC) may be trading as an unregistered security.
• Evan Van Ness took to Twitter to state that five companies, Antpool, FoundryUSA, f2pool, ViaBTC, and Binance, had mined 850 of the previous 1,000 blocks on the Bitcoin network.
• U.S. Securities and Exchange Commission Chairman Gary Gensler stated his conviction that bitcoin (BTC) is a commodity earlier this year.

The world of digital assets has become a very popular topic among investors, traders, and regulators alike. One of the most discussed topics is the classification of Bitcoin (BTC) as an investment asset. Recently, a former director of the Securities and Exchange Commission’s Office of Internet Enforcement, John Reed Stark, has come forward to suggest that Bitcoin may be trading as an unregistered security.

The suggestion was made after a tweet by Ethereum supporter Evan Van Ness regarding the concentration of the Bitcoin mining industry. Van Ness stated that only five companies, Antpool, FoundryUSA, f2pool, ViaBTC, and Binance, had mined 850 of the previous 1,000 blocks on the Bitcoin network. This data showed that these companies were responsible for more than 80% of all blocks, and more than 50% of that output was split between Antpool and FoundryUSA.

In response to this information, John Reed Stark asked why Bitcoin did not qualify as a security that had to be registered with the SEC. His comments came shortly after U.S. Securities and Exchange Commission Chairman Gary Gensler restated his conviction that bitcoin (BTC) is a commodity earlier this year. This announcement was celebrated by Bitcoin supporters who viewed the announcement as a sign that Bitcoin should be viewed separately from other tokens classified as securities.

It remains to be seen how regulators will respond to Stark’s suggestion. However, it is clear that there is a growing interest in the classification of digital assets, and this discussion is likely to continue to evolve as more information is revealed. As the world continues to explore the potential of digital assets, it is important to keep in mind the different rules and regulations that may be applicable to these assets. As such, it is important to stay informed and up to date on the latest news and developments.