A federal judge has shot down a request to relinquish control over embattled crypto exchange FTX’s $7.3 billion in disputed assets during a Thursday bankruptcy hearing, dashing Bahamian liquidators’ hopes that the island nation’s judicial system could stake a claim to some 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].”
During the hearing at the U.S. Bankruptcy Court for the District of Delaware, Judge Dorsey considered a key point of contention between the case’s various players: the question of who owns the insolvent exchange’s billions of dollars worth of crypto 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 advisors, who took over the exchange after the company’s founder Sam Bankman-Fried was arrested on fraud charges last December, argued against the request.
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.”
While Dorsey made his point of view on the issue clear, he has not yet made an official ruling on the matter. He plans to do so on June 9, when the case is back in session.