US courts should have control over $7.3B in disputed assets, says FTX bankruptcy judge.
During a bankruptcy hearing on Thursday, a federal judge rejected a request to hand over control of FTX, a troubled cryptocurrency exchange, and its $7.3 billion in disputed assets. This dashed the hopes of Bahamian liquidators who had hoped that their country’s judicial system could claim some of the assets. “Under no circumstances would I ever defer a core jurisdictional issue to a foreign court,” said U.S. Bankruptcy Judge John Dorsey. “And, the core jurisdictional issue here is whose assets are [these].”
At the U.S. Bankruptcy Court for the District of Delaware, Judge Dorsey considered a key point of contention between the various players involved: who owns the insolvent exchange’s billions of dollars’ worth of cryptocurrency and cash assets. While liquidators based in the Bahamas argued that a Bahamian judge should preside over part of the bankruptcy case, FTX’s restructuring advisers, who took over the exchange after the company’s founder Sam Bankman-Fried was arrested on fraud charges last December, argued against the request.
Although Dorsey made his opinion on the matter clear during the hearing, he has not yet issued an official ruling. On June 9, when the case resumes, he plans to do so. The judge ultimately sided with FTX’s advisers, stating that “The [courts in the Bahamas] may have concurrent jurisdiction,” Dorsey said. “But as a practical matter, they don’t have access to the assets.”