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During a bankruptcy hearing on Thursday, a federal judge rejected a plea to hand over control of FTX, a troubled cryptocurrency exchange, and its $7.3 billion worth of disputed assets. This ruling dashed the hopes of Bahamian liquidators who had anticipated that their country's judicial system might have a chance to assert ownership over a portion of the assets.
“Under no circumstances would I ever defer a core jurisdictional issue to a foreign court," U.S. Bankruptcy Judge John Dorsey said. “And, the core jurisdictional issue here is whose assets are [these].”
At the U.S. Bankruptcy Court for the District of Delaware, an essential point of contention among the parties involved in the case was brought before Judge Dorsey during the hearing. The central question at hand revolved around the ownership of the insolvent exchange's extensive holdings, consisting of billions of dollars in cryptocurrencies and cash assets.
Although liquidators operating in the Bahamas insisted on having a Bahamian judge oversee a portion of the bankruptcy proceedings, FTX's restructuring advisors, who assumed control of the exchange after its founder Sam Bankman-Fried was arrested on fraud allegations in December of last year, opposed the plea.
The judge ultimately sided with FTX’s advisors, adding: “The [courts in the Bahamas] may have concurrent jurisdiction,” Dorsey said. “But as a practical matter, they don't have access to the assets.”
Despite clarifying his stance on the issue, Dorsey has refrained from delivering a definitive verdict at this time. However, he has scheduled to announce his official ruling on June 9, when the case resumes in session.
