The Bahamas wants the US government to give back 35 different properties that are valued at more than $256 million that were purchased by Sam Bankman-Fried’s cryptocurrency exchange FTX before it filed for Chapter 11 bankruptcy protection last month.
Attorneys representing the Bahamian government told a federal bankruptcy judge in Delaware that Bankman-Fried and Ryan Salame, who was his co-CEO at the time, amassed a massive real estate portfolio throughout New Providence island in the Bahamas.
The Bahamas representatives told the judge that it would be illegal under Bahamian law to allow US bankruptcy proceedings to administer the properties, according to CNBC.
The Bahamian government wants the judge to dismiss bankruptcy proceedings against an FTX subsidiary that is listed as the owner of the properties.
“Bahamian law does not allow recognition of a foreign insolvency proceeding for a Bahamian company,” the attorneys for the island nation told the judge.
But Bankman-Fried’s successor as CEO, John Ray, who was installed in the role to oversee the company’s bankruptcy restructuring, will likely resist any efforts by the Bahamian government to gain control over the assets.
Ray told the House Financial Services Committee on Tuesday that he is seeking to recover more than $7 billion in funds that could be returned to FTX investors — though the process is likely to take weeks, if not months.
“At the end of the day, we are not going to be able to recover all the losses here,” Ray said on Tuesday.
“There was money spent that we will never get back.”
Bankman-Fried was arrested by Bahamian authorities on Monday evening at the request of the US government. He is being held at a jail in the Bahamian capital of Nassau.
On Tuesday, federal prosecutors in Manhattan unsealed the indictment against Bankman-Fried, who faces charges of wire fraud, securities fraud and money laundering.
They allege that Bankman-Fried devised “a scheme and artifice to defraud” FTX’s customers and investors beginning in 2019.
He diverted their money to cover expenses, debts and risky trades at his crypto hedge fund, Alameda Research, and to make lavish real estate purchases and large political donations, prosecutors said in a 13-page indictment.
If convicted, he faces a maximum of more than 100 years in federal prison.
Bankman-Fried has said he will fight extradition to the US, though that would just delay the process by a few weeks, according to legal experts.
Under Bankman-Fried’s watch, FTX spent lavishly on pricey real estate for both co-CEOs and other top executives at the company.
Bankman-Fried’s parents — Stanford University law professors Joseph Bankman and Barbara Fried — are listed as the owners of a $16 million luxury property that they used as a “vacation home.”
A spokesperson for the couple said they started the process of returning the property to FTX before the company filed for bankruptcy.
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