On November 11, 2022, cryptocurrency exchange FTX Trading Ltd., incorporated in Antigua and Barbuda and headquartered in The Bahamas, also called FTX.com, filed a petition for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court for the District of Delaware (Case No. 22-11068 JTD) reporting between $10 to $50 billion dollars in both assets and liabilities. The company sought jointly administered bankruptcy protection for more than 130 affiliated entities (Case No. 22-11066 through 22-11177) including West Realm Shires Services Inc., FTX US and Alameda Research Ltd.  These entities were not registered under Louisiana Securities Law.

Chapter 11 is a type of bankruptcy designed to allow insolvent companies to restructure their financial obligations, through reorganization, sale or otherwise. Very few cryptocurrency companies have filed bankruptcy proceedings to date in the United States.  As a result, few decision address how digital assets will be treated in a bankruptcy proceeding and whether or not account holders will be able to sell or get back their cryptocurrency assets.

Customers of these FTX companies may wish to consult with their own counsel about how the bankruptcy proceeding will affect their rights and the value of their accounts.

If you have questions please contact the Louisiana Office of Financial Institutions, Securities Division, at 225-925-4512.