A top government official in the Bahamas slammed new FTX CEO John Ray III for his “extremely regrettable” claims in the heated bankruptcy battle over the imploded crypto company.
Bahamas Attorney General Ryan Pinder took aim at Ray after the executive accused the Caribbean country of improperly seizing control of FTX assets in a Delaware bankruptcy court last week.
FTX’s new leadership has “misrepresented the timely action taken by the Securities Commission and used inaccurate allegations lodged in the transfer motion they had filed to do so,” Pinder said during a national address on Sunday night.
“It is possible that the prospect of multimillion-dollar legal and consultancy fees is driving both their legal strategy and their intemperate statements,” Pinder added.
He urged FTX officials to show “prudence and accuracy in all future filings.”
In court filings this month, Ray and other FTX officials accused Bahamian officials of improperly seizing assets from the platform after bankruptcy proceedings had already begun.
Disgraced FTX founder Sam Bankman-Fried and his “cabal of roommates” ran the company and dozens of affiliates from a penthouse in the Bahamas, where the government has adopted a friendly stance toward the cryptocurrency sector.
The clash between the Ray-led FTX and officials in the Bahamas is unfolding as officials scramble to sort through the messy bankruptcy process. More than 100 FTX affiliates have filed for bankruptcy protection, with at least $1 billion in client funds — and likely much more — still missing.
Bankruptcy filings by Ray’s legal team said FTX had uncovered “credible evidence that the Bahamian government is responsible for directing unauthorized access to the Debtors’ systems for the purpose of obtaining digital assets of the Debtors — that took place after the commencement of these cases.”
Bahamian regulators said they took action to safeguard the assets and had previously argued that Bahamas-based FTX couldn’t file for bankruptcy in the US.
Bankman-Fried has faced intense legal and regulatory scrutiny over his actions at FTX since revelations emerged that he transferred $10 billion in client funds to the platform’s sister cryptocurrency trading firm, the now-defunct Alameda Research.
In a bankruptcy court hearing last week, FTX officials alleged Bankman-Fried ran the company as if it were his “personal fiefdom.” The ex-CEO is accused of pillaging company resources to fuel a spending spree that included some $300 million on luxury real estate purchases.
Billionaire investor Mark Cuban, a noted cryptocurrency advocate, suggested in a video posted Saturday that Bankman-Fried could eventually face jail time.
“I don’t know all the details, but if I were him, I’d be afraid of going to jail for a long time,” Cuban told TMZ. “I talked to the guy and thought he was smart.”
“I had no idea he was going to take other people’s money and put it to his personal use.”
Meanwhile, Ray has publicly blasted Bankman-Fried and other FTX executives for virtually ignoring corporate governance standards while running the company.
“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” Ray said in a court filing.