The Bahamas wants FTX’s real-estate holdings back after the company filed for bankruptcy.
Key Details
- FTX spent $256.3 million to purchase 35 different properties, and now the Bahamas wants the land back.
- Regulators of the country are attempting to take back the property, saying that it is illegal to administer it in U.S. court under Bahamas law.
- The Bahamas taking the land back is an issue considering FTX’s attorneys committed the money from restructuring the business and its property sales to go to clients that suffered in the fall of the company.
Why it’s news
FTX spent $256.3 million on buying and maintaining the property in New Providence, Bahamas. After the business filed for bankruptcy, the property was to be dealt with in U.S. court—but the Bahamas want the land back.
The country’s regulators told the judge over the matter that the properties being controlled by U.S. courts would be administratively ineffective and illegal under Bahamian law.
When FTX filed for bankruptcy, many of its customers lost a lot of money. In an effort to fix that, FTX’s attorneys committed the money from selling the millions in property to go back to customers who suffered from the blow.
If the property falls back into the hands of the Bahamian government, then those customers will not see the money from the sales.
It is unsure yet what will happen with the land, whether it be granted to the U.S. or back to the Bahamas.
Backing up a bit
FTX was one of the giants in the world of cryptocurrency before it recently plunged in value—and it happened fast.
Many were unsure what happened to FTX, but the company took risky bets that didn’t turn out to be good moves.
FTX had an affiliated trading firm called Alameda Research. FTX lent billions of dollars worth of customer assets to fund investments with the firm, according to people familiar with the matter.
FTX CEO Sam Bankman-Fried says Alameda owes the company about $10 billion that it lent to fund its investments. The money that FTX lent to Alameda was the customer’s money that they had put into accounts for trading.
Considering FTX had about $16 billion in customers’ money, the company lent over half of its money to fund investments with no real risk management in place.
FTX was forced to pause customer withdrawals after $5 billion in withdrawal requests were sent to the company.
