The market regulator of the Bahamas confirmed that they have seized $3.5 billion worth of digital assets from FTX, whose formerly-large crypto empire faced an unceremonious and sudden collapse last month and folded into itself soon after. The Securities Commission of The Bahamas, in an official statement, informed that it had directed the transfer of all the digital assets from FTX Digital markets – the Bahamian subsidiary of FTX – to digital wallets controlled by the Commission “for safekeeping.”

In the statement, the market regulator of the country further added that the digital assets that had been seized by the Commission on November 12 (worth $3.5 billion, as informed earlier) were being held on a temporary basis until The Bahamas Supreme Court directed them to transfer the assets to customers and creditors (which will tackle some of the billion-dollar-debt that FTX is floundering in), or to the liquidators of the insolvency estate. FTX, soon after the deal with Binance fell through, had filed for Chapter 11 bankruptcy protection.

This comes soon after the Commission had applied for directions from the Bahamian Supreme Court regarding the US debtors and the court-appointed Joint Provisional Liquidators (“JPLs”) of FTX Digital Markets. The directions requested are regarding whether they should provide the US debtors with information related to the digital assets in the Commission’s digital wallets. At that time, the Court directed the Commission to provide “lawful assistance” to domestic or foreign regulatory authorities.

It also comes nearly two weeks after the Commission hinted to have seized some of FTX’s digital assets. The seizing of the funds came on the back of the regulator receiving information from disgraced former FTX CEO and co-founder Sam Bankman-Fried regarding the cyberattacks on FTX Digital Markets, as the Commission “determined that there was a significant risk of imminent dissipation as to the digital assets under the custody or control of FTXDM.” The funds were transferred after millions were stolen from the fallen crypto exchange last month.

Bankman-Fried, who was arrested in the Bahamas earlier this month, was released last week on bail and is expected to plea before a federal court next year – on January 3. For now, the Commission will continue to probe into the quick demise of FTX’s crypto empire and collaborate with other supervisory authorities, while taking measures to safeguard FTX Digital Markets’ assets and the interests of its creditors and customers.