FTX Digital Markets (FDM), the subsidiary of FTX based in Bahamas, has filed for Chapter 15 bankruptcy in the Southern District of New York.
Under the law, this step facilitates the resolution of insolvency cases involving assets and entities located in more than one jurisdiction.
Chapter 15 may protect FDM from forfeiture of assets within the States during a liquidation in the Bahamas.
Recognition of foreign proceedings by a US court will suspend filing claims against the company, CoinDesk points out. The other parties have three weeks to object.
FTX’s parent company, Alameda Research, and about 130 other affiliates filed for bankruptcy on November 11.