The Bahamas Attorney General (AG) and Legal Affairs Minister Ryan Bender has confirmed that the collapsed cryptocurrency exchange FTX is the focus of an “active and ongoing” investigation by authorities from the Caribbean nation.
In a national statement broadcast live on the Prime Minister’s Office’s Facebook page on November 27, Binder explained that “FTX Digital Markets matters” are under scrutiny by “civil and criminal authorities” and the Bahamas authorities are working with “a number of specialists and experts and will continue to do so as needed.” .”
He added, “The Securities Commission, Financial Intelligence Unit and Financial Crimes Unit of the Royal Bahamas Police Force will continue to investigate the facts and circumstances related to the FTX crisis and any potential violations of Bahamas law.”
Binder also revealed that the relevant Bahamas authorities will attempt to hold any companies or individuals found to have committed any wrongdoing to account during the investigation, while cooperating with other regulatory agencies and law enforcement agencies around the world.
These events remind us of the lessons from other securities and financial systems about the need for strong cross-border cooperation. The worldwide public is best served through strong international regulatory cooperation.”
The Bahamas Securities Commission suspended FTX Digital Markets (FDM)’s license to conduct business and stripped its directors of their authority on November 10.
On November 12, they ordered that all of FDM’s digital assets be transferred to a digital wallet owned by the “Custody” committee.
Bender noted that the country’s regulatory authority had taken further safeguards approved by the Supreme Court but declined to go into further detail until “we are confident that doing so will not jeopardize any aspect of the ongoing investigations.”
Pinder also took the opportunity to criticize a November 17 emergency proposal by FTX Trading Limited, which called for the “Bahamian government” to “direct unauthorized access to debtors’ systems” after the commencement of Chapter 11 bankruptcy filings in the US.
He called the allegations “extremely unfortunate” a misrepresentation of “the timely action of the SEC,” while also defending all steps the country’s regulator has taken so far.
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The Bahamas encouraged crypto firms to the island nation to help its economy, but has since been rocked by the collapse of FTX.
It was also hit hard by Hurricane Dorian in 2019 and the COVID-19 pandemic that began in 2020, bringing its tourism-based economy to a severe halt. With FTX gone, you have many jobs in the small country.
But, Binder explained his belief that despite the “personal tragedies” associated with the FTX collapse, he expects “little contagion beyond the digital asset realm here in the Bahamas and around the world.”
He cited Standard & Poor’s November 22 ratings for the Bahamas, which predicted a stable outlook, citing the performance of the tourism sector.
“Standard & Poor’s projected a stable outlook for our economy based in part on the assumption that there would be no material negative impact on the Bahamas from the global meltdown of FTX,” Binder said.