The Tribune

By EARYEL BOWLEG

TribuneStaff Reporter

ebowleg@tribunemedia.net

THREE people have filed a local lawsuit against disgraced former FTX CEO Sam Bankman-Fried and his associated companies.

The writ, filed on December 21, said the plaintiffs are seeking damages because they suffered a loss as a result of Bankman-Fried and his “co-conspirators” engaging in a scheme to “defraud equity investors of FTX Trading Ltd”.

Rebecca Gallagher, a British citizen who now lives in the United States, is one of the plaintiffs. She claims she lost thousands of dollars directly with FTX and has recently filed a local police complaint.

The Tribune asked Police Commissioner Clayton Fernander if there were any police complaints filed locally related to FTX, to which he replied: “At this time, based on my information, we have one matter that we are looking at closely with the Security Commission at this time.”

However, he did not provide many details.

Ms Gallagher, 61, did her trading on the Celsius platform mainly which she described as a loan/yield platform.

“Directly with FTX, I’ve lost about $3,000 but what he caused to happen to Celsius (and) contributed to the Celsius collapse — I’ve lost my life savings,” she said.

Asked how her life savings were lost, she explained: “Well, you know that crypto fluctuates. So the height last November, when Bitcoin was 67,000 and Etherium was 4,700, my portfolio had grown to $1.4 million and it was going to continue growing further. So I’ve also lost all the future potential of what that could have turned into had I still had my coins.”

She first bought some FTT token, which is the native token of the FTX exchange back in the Spring of 2021.

“I bought $5,000 of FTT token and then I opened up an account on the exchange, the US branch of the exchange, and I bought some Matic token, which I unfortunately left on the exchange.

“So when all this happened, I started hearing some rumours. So I initiated a withdrawal to my own wallet, and I thought I got my funds out in time. But instead, I checked a couple of days later, because it said the transaction was pending, my funds would be in my own wallet within a couple of hours.

“And then three days later, they hadn’t arrived and that’s when I realised that I’d been caught with my funds frozen on the platform.”

The fall of FTX has cast a major shadow over the crypto-industry.

Ms Gallagher said she was optimistic about investing in crypto.

“There isn’t a third party involvement in these exchanges unless you decide to do what I did and trust a central entity and an individual who turns out to be a bad player - but that isn’t what crypto was designed for. It was designed for you to be like a sovereign individual who can send your money where you want, when you want and there were no barriers to that. So I just think that’s the way we’re going to go in the future because the world is moving in a digital direction,” the 61-year-old said.

“I haven’t used paper money in a long while anyway. You know, it’s been years since I’ve gone into the bank and stood in line to take out cash, pay for everything with a debit or a credit card. So I just could see that this was the wave of the future, like seeing the internet back when the dot.com began and getting on board with it. So this is a major setback for the space and certainly a gigantic setback for me, which I may not recover from because it took me all my life to save that up. I was ready to retire. That’s why I’d sold my house and put all my savings into this because it was paying yield.”

FTX filed for bankruptcy in the United States last month, setting off a whirlwind chain of events which saw the Bahamas headquarters placed into liquidity. Earlier this month, Bankman-Fried was arrested after he was indicted in the US and then last week he was extradited to New York. He has since been released on a $250m bond and placed under house arrest at his parents’ home in California.

Ms Gallagher came to The Bahamas to see the case unfold and was surprised to see how young the man allegedly responsible was.

“I was shocked that he’s only a couple of years older than my oldest son and it just seemed shocking that he had masterminded such a devastation because he’s a strange person.”

Although she invested on the US side of the FTX platform, Ms Gallagher felt the importance of filing in The Bahamas even though she does not live here.

“Nobody had done so and there’s only so much jurisdiction that the chapter 11 process will have from here in the States. Having something filed in The Bahamas is going to cause things to be done there that wouldn’t otherwise be done,” she said.

“So it was very important to file something on Bahamian soil so that we can fully investigate everything that was going on and unearth all these shenanigans and try and get some restitution for people like myself and others who have suffered.”

In regards to an update on local FTX investigations, Commissioner Fernander said the investigation is still active.

“If we need to speak to him (Bankman-Fried) on the matters that we are looking at, we will travel that way and speak to him on that side,” the police chief said.