A US judge rejects a request to relinquish control over $7.3B in disputed FTX assets; liquidators in the Bahamas argued a local judge should oversee the process
Liquidators had argued the assets should be overseen by a court in the Bahamas during a bankruptcy hearing for the exchange on Thursday.
Context & Ripple Effects
The jurisdictional fight over FTX's remains dates to the collapse itself: days after it went down, the [[a:984741|Bahamas Securities Commission froze the assets of FTX Digital Markets and appointed a provisional liquidator]], and new management and Bahamian regulators have been contesting control ever since. In December the commission said it was holding $3.5B on a temporary basis for customers and creditors, while FTX argued the assets it transferred were worth far less by then — ~$167M versus ~$296M when moved.
Thursday's ruling settles the forum question in the US court's favor: rather than hand the $7.3B pool to a Bahamian judge, the Delaware process keeps it inside the single estate that later produced the draft plan to repay creditors in USD. That matters because two parallel recoveries would have split the same asset base between two legal systems.
First-order effects
- Bahamas liquidators lose their bid for local oversight of the $7.3B, leaving all disputed assets under the US Chapter 11 estate and its distribution timetable.
- Creditors who filed claims through the Bahamian side are funneled into the US-led recovery instead of a separate island-court process.
Second-order effects
- The ruling weakens the Bahamas Securities Commission's negotiating position over the $3.5B it holds temporarily, pushing toward delivery through the US plan rather than independent disposal.
- With one court controlling the asset pool, the adviser-heavy estate — already one of the costliest Chapter 11 cases on record — absorbs the full recovery workload, sustaining pressure on administrative costs per dollar returned.
Third-order effects
- For offshore-domiciled crypto exchanges, the case hardens the precedent that insolvency resolves in the venue where the parent files, not where the subsidiary is licensed — narrowing small-jurisdiction regulators' leverage in future collapses.
- It points toward consolidation of cross-border crypto recoveries into single-court, USD-settled plans, with national regulators recast as asset custodians rather than co-administrators.
The trend: Cross-border crypto bankruptcies are consolidating around a single dominant court and currency of settlement, shrinking the role of local regulators from co-liquidators to custodians.