In mid-November 2022, following the Chapter 11 bankruptcy filing by the exchange FTX and its large number of subsidiaries, The Bahamas’ regulator appointed Kevin Cambridge and Peter Greaves from PWC as the joint provisional FTX liquidators in the proceedings. PWC has recently published a report that shows the crypto exchange’s Bahamian entity FTX Digital Markets reportedly commingled client funds.

FTX Digital Markets essentially held “limited accounting records,” and the PWC auditors noted that there “appears to have been little distinction between what represents potentially client monies and corporate funds.” Additionally, along with the alleged commingling of funds, data was reportedly commingled as well between the company’s wider affiliates “with little or no segregation applied.”

The auditors discovered $219.5 million in cash held at various banks, and requests have been made to the financial institutions to retrieve the funds. PWC also discussed the various properties purchased in The Bahamas by FTX executives, and it further noted that FTX Digital also owns about $3 million in ancillary assets. In addition to the assets discovered, a significant portion of the crypto assets is not under the joint provisional FTX liquidators’ control due to the $323 million hack stemming from FTX International.

(By Jamie Redman)

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