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Desperate FTX users employ shady tactics to bypass bankruptcy process Desperate FTX users employ shady tactics to bypass bankruptcy process

Desperate FTX users employ shady tactics to bypass bankruptcy process

The crypto community is split of whether using the "Bahamas loophole" to withdraw stuck FTX funds is justified.

Desperate FTX users employ shady tactics to bypass bankruptcy process

Cover art/illustration via CryptoSlate

Social media is flooded with posts from desperate FTX users asking for help to withdraw locked funds.

According to Zane Tackett, the former Head of Institutional Sales at FTX, Bahamians are authorized to take funds off the platform despite a freeze on withdrawals at the troubled exchange.

As a result, Bahamian citizens have begun offering services to funnel locked funds out of the exchange. Furthermore, some FTX users are dangling significant bribes to FTX employees to change their country of residence account settings to the Bahamas.

On-chain data shows withdrawals happening

Despite the questionable legality, morality issues, and the scope to be scammed by going this route, @statelayer posted a screenshot of transactions showing withdrawals from FTX. He added that FTX’s Tether balance has since halved as a result.

Although @statelayer said the transactions are “people clearly abusing this Bahamas loophole,” it is unclear whether these withdrawals relate to FTX employees or desperate users who have found a reliable path off the exchange.

Bitcoin Magazine Analyst Dylan LeClair posted screenshots of a user who managed to get “KYC’d,” subsequently withdrawing significant sums off the platform.

Bahamas loophole splits the community

Commenting on the above user successfully managing to withdraw his money, @depression2019 supported the move, saying he would probably do the same if he had a sizeable chunk of money on FTX.

Meanwhile, @depression2019 brushed aside the possible legal implications, justifying the action as necessary to bypass the lengthy bankruptcy process only to get a small percentage back, if at all.

Similarly, “lawyer by day” @wassielawyer said, given the complicated mess of the FTX bankruptcy, any legal ramifications “will take a few years” to catch up. He added that this is not legal or financial advice.

Will take a few years for people to even consider pursuing you given what a dumpster fire this is.

However, others took a different view. @ThinkingUSD saw this as a black-and-white matter, calling such actions straight-up financial crime.

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