The FTX debacle shook the priorities of the Bahamian authorities. The country's attorney general, Ryan Pinder, has defeated the actions of the "nation of laws" against the collapsed cryptocurrency exchange.
FTX moved its headquarters to The Bahamas in 2021, and its Founder and former CEO, Sam Bankman-Fried, ran all operations from the island. Valued at $34 billion in its last funding round, the crypto exchange collapsed within days and is now under bankruptcy proceedings. Additionally, the authorities in the Bahamas opened an investigation against the exchange for any possible "criminal misconduct."
"It is important for me to share this summary of what took place, because, over the last few weeks, the basic facts have been obscured by guessing games and rumors," Pinder stated. "We understand the enormous interest in this story, but as a government, we decided right away that what was most important was not to engage with speculation or gossip, but instead to proceed methodically and deliberately in accordance with the exercise of due process and the rule of law."
A Messy Collapse
In addition, the Bahamas-registered entity of FTX filed for bankruptcy in the United States. Meanwhile, the island's financial regulator suspended its license and transferred the assets of local customers to government-controlled wallets with a court order.
On top of that, Pinder reiterated that the newly appointed CEO of FTX, John Ray III, who is overseeing the bankruptcy proceedings, "misrepresented" the actions of the Bahamas government. Ray earlier accused the Bahamas regulator of ordering "unauthorized" transactions. However, the Bahamas government maintained that it was for safeguarding the clients' funds.
"We urge all authorities here and abroad, at a minimum, to exercise at least the same amount of prudence and restraint in their public commentary as we do so as not to prejudice any of the proceedings that are ongoing," Pinder added.
"It is extremely regrettable that in chapter 11 filings for bankruptcy protection made in New York last week that the new chief executive of FTX Trading Limited – not the Bahamas-based FTX Digital Markets, but an affiliate company incorporated in Antigua and Barbuda – misrepresented the timely action taken by the Securities Commission and used inaccurate allegations lodged in the transfer motion they had filed to do so."
Pinder's attempt with the speech looks to justify the actions of the Bahamas authorities against collapsed FTX and ensure that the island is suitable for businesses and tourism.
Meanwhile, the regulators of Cyprus and Australia have suspended the license of local FTX entities, whereas the Monetary Authority of Singapore clarified that it not regulating FTX and thus protecting local customers would be impossible.
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