FTX Debtors will seek the return of cryptocurrency held by the Bahamas regulator.

FTX Trading and its affiliated debtors announced on Friday that they will seek the return of cryptocurrency controlled by the Bahamas Securities Commission to their chapter 11 estates for the benefit of creditors.

The Bahamas Security Commission announced on Thursday that it has been holding more than $3.5 billion in FTX customer assets since November 12. According to the FTX Debtors, the funds were transferred after bankruptcy proceedings were initiated by former FTX CEO Sam Bankman-Friend and former CTO Gary Wang at the request of Bahamas authorities.

“The FTX Debtors have informed the Bahamas Commission that none of Mr. Bankman-Fried, Mr. Wang, or the Bahamas Commission had the authority to seize the FTX Debtors’ cryptocurrency,” the group said in a statement.

According to the debtors, the cryptocurrency in a Fireblocks wallet controlled by the Bahamas regulator was worth $296 million at spot market prices when it was transferred and is now worth $167 million.

“There can be no assurances that such a large amount of FTT could be sold at spot prices, or even at all,” the debtors said in a statement, referring to FTX’s native token. “The FTX Debtors request that the Bahamas Commission clear up any confusion caused by their recent statements and provide the public with accurate information regarding the cryptocurrency seized and how it was valued for the purposes of these statements.”

Disclaimer: Beginning in 2021, Michael McCaffrey, The Block’s former CEO and majority owner, took a series of loans from The Block’s founder and former FTX and Alameda CEO Sam Bankman-Fried. After failing to disclose those transactions, McCaffrey resigned from the company in December 2022.