The collapse of cryptocurrency exchange FTX has opened a hornet’s nest of squabbles between foreign governments and its new U.S. chief executive, John J. Ray III, the Wall Street Journal reported. In Cyprus, the country’s securities regulator is complaining that Mr. Ray’s decision to place FTX in bankruptcy has stymied investigations and is preventing European customers from getting their money back. Officials in the Bahamas, where FTX moved its headquarters last year, are accusing Mr. Ray of making false statements and suggesting that his team is motivated by the prospects of earning hefty legal fees. In Turkey, authorities have seized the assets of FTX’s local subsidiary, an affront to Mr. Ray’s efforts to sweep FTX’s assets into the chapter 11 process in Delaware. Such disputes reflect a disconnect between the global aspirations of cryptocurrencies and the hard facts of the law, whose powers often don’t extend beyond a nation’s borders. Proponents say the cross-border nature of crypto makes sending money to someone on the other side of the world as easy as sending an email, and many crypto firms have offered their services to customers all over the world and have established headquarters in offshore jurisdictions. But laws meant to protect customers when things go wrong — and the bankruptcy regime in particular — are deeply tied up with national boundaries, and cross-border cooperation is never a guarantee.
