Case Review: The FTX Digital Markets Liquidation — How the Bahamas Supreme Court Handled a Global Crypto Collapse
From provisional liquidation in November 2022 to full liquidation, a cross-border settlement with the US Chapter 11 debtors, and property sales — a review of the FTX Digital Markets case in the Supreme Court of The Bahamas.
When Sam Bankman-Fried’s FTX empire collapsed in November 2022, its Bahamian subsidiary, FTX Digital Markets Ltd, was placed under the control of court-appointed liquidators by the Supreme Court of The Bahamas. The case has become a defining example of how a Caribbean financial centre manages a multi-billion-dollar cross-border insolvency.
- The Tribune (Tribune 242): ‘Impossible situation’ fear for FTX Bahamas wind-up
- The Tribune (Tribune 242): FTX Bahamas put into full liquidation
- The Tribune (Tribune 242): FTX’s Bahamian liquidators ‘did everything in their power’
- The Tribune (Tribune 242): FTX liquidators get $38m from selling Bahamas properties
1. Provisional Liquidation (November 2022)
Acting on regulatory concerns, the Supreme Court appointed joint provisional liquidators — Brian Simms KC (Lennox Paton), Kevin Cambridge (PwC Bahamas) and Peter Greaves (PwC Hong Kong) — to take control of FTX Digital Markets. Provisional liquidation is an emergency tool: it freezes the company’s affairs and puts independent officers in charge to preserve assets before a final winding-up order.
2. The Cross-Border Clash with the US Chapter 11 Debtors
At the same time, more than 130 FTX entities filed for Chapter 11 in Delaware under restructuring chief John J. Ray III. As reported by The Tribune, the Bahamian liquidators warned the court that disputes over funding, records and control of assets risked making the local wind-up an “impossible situation”. The key questions were:
- Which court controls assets and customer claims connected to the Bahamas?
- How should Bahamian and US insolvency processes cooperate?
- Who has access to the exchange’s electronic records?
3. Full Liquidation and the Global Settlement
In November 2023, Justice Loren Klein placed FTX Digital Markets into full, court-supervised liquidation. In early 2024, he approved a global settlement between the Bahamian liquidators and the US debtors, describing it as a practical resolution in the commercial interests of creditors. The settlement coordinated the treatment of customer claims across the two proceedings rather than leaving them to compete.
4. Asset Recovery: Bahamian Real Estate
A major part of the liquidation has been realising luxury properties acquired in The Bahamas by FTX and its executives. Reports to the court, covered by The Tribune in January 2026, show the liquidators raised around US$38 million from property sales for the benefit of creditors.
5. Lessons from the FTX Case
- Provisional liquidators act fast: Bahamian courts can appoint them within days to protect assets.
- Cross-border cooperation is essential: negotiated protocols and settlements reduce cost and delay for creditors.
- Regulation matters: the case accelerated reforms to The Bahamas’ digital asset regulatory framework.
Frequently Asked Questions
What is a provisional liquidator in The Bahamas?
A provisional liquidator is appointed by the Supreme Court on an urgent basis, before a final winding-up order, to take control of a company and preserve its assets for creditors.
Who were the liquidators of FTX Digital Markets?
Brian Simms KC of Lennox Paton, Kevin Cambridge of PwC Bahamas and Peter Greaves of PwC Hong Kong were appointed by the Supreme Court of The Bahamas.
How did the Bahamian and US FTX proceedings resolve their dispute?
In early 2024 the Bahamas Supreme Court approved a global settlement between the Bahamian liquidators and the US Chapter 11 debtors, coordinating the handling of customer claims.
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