Report Reveals Limited Accounting Records, Commingled Funds at FTX Digital Markets in the Bahamas

PWC, one of the Big Four auditors and one of the largest professional services networks in the world, recently published a report on FTX Digital Markets, a subsidiary of a bankrupt Bahamas-based crypto exchange. The report states that the organization’s accounts have been restricted, and also notes that there is “little difference between what constitutes lead money and corporate funds.”

FTX Joint Interim Liquidators Investigate Bahamas Subsidiary

In mid-November 2022, after FTX and its large number of subsidiaries filed for Chapter 11 bankruptcy, the Bahamas regulator appointed PWC’s Kevin Cambridge and Peter Greaves as FTX’s joint interim liquidators in a proceeding. PWC recently published report this shows that the Bahamian arm of crypto exchange FTX Digital Markets has reportedly mixed customer funds.

FTX Digital Markets essentially operated “restricted accounts” and PWC’s auditors noted that “there seemed to be little difference between what constituted lead money and corporate funds.” Additionally, along with the alleged mixing of funds, data has also been reportedly mixed between the company’s broader affiliates “with little or no separation.”

Auditors found $219.5 million worth of cash in various banks, and requests for refunds were made to financial institutions. PWC also discussed various properties acquired in the Bahamas by FTX executives and further noted that FTX Digital also owns approximately $3 million in ancillary assets. In addition to the discovered assets, a significant portion of the crypto assets are not under the joint temporary control of the FTX liquidators due to the $323 million hack by FTX International.

” [joint provisional liquidators] requested the transfer of $46.7 million to [tether] from an account in the name of FTX Digital, and they are awaiting the transfer of these assets into safekeeping, ”the PWC auditors report further discloses. The report also called for further investigations into “cash management”, “prior transactions” and “customer migration”. FTX’s joint interim liquidators say they continue to hire about 16 people for ongoing investigations and to explore “the possibility of restructuring the business.”

What do you think of PWC’s recent report on FTX subsidiary in the Bahamas? Let us know what you think about it in the comments section below.

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