FTX under ‘active’ civil and criminal investigation: Bahamas AG

Bahamas Attorney General (AG) and Minister for Legal Affairs Ryan Pinder has confirmed that the crashed crypto exchange FTX is the focus of an “active and ongoing” investigation by authorities in the Caribbean nation.

in a national statement which was broadcast live on the Prime Minister’s Office Facebook page on November 27, Pinder explained that “FTX Digital Markets matters” are under the scrutiny of “civil and criminal authorities” and that the authorities of the The Bahamas is working with “a number of specialists and experts and will continue to do so as the need arises.”

“The Securities and Exchange Commission, our financial intelligence unit and the financial crimes unit of the Royal Bahamas Police will continue to investigate the facts and circumstances related to the FTX insolvency crisis and any potential violations of Bahamian law,” it added. .

Pinder also revealed that the relevant Bahamian authorities will seek to hold accountable any company or individual found to have committed any wrongdoing during the investigation, while cooperating with other regulatory agencies and law enforcement agencies around the world.

“These events remind us of the lessons learned from securities and other financial regulations on the need for strong cross-border cooperation. The public around the world will be better served by strong international regulatory cooperation,” he said.

The Bahamas Securities Commission suspended FTX Digital Markets (FDM) license to conduct business and stripped its directors of their powers on November 10.

On November 12 they ordered the transfer of all FDM digital assets to a digital wallet owned by the “escrow” commission.

Pinder mentioned the country regulatory authority it has taken further protective measures approved by the Supreme Court, but declined to elaborate until “we are confident that doing so will not jeopardize any aspect of the ongoing investigations.”

Pinder also took the opportunity to criticize the November 17 emergency. movement by FTX Trading Limited, which criticized the “government of the Bahamas” for “directing unauthorized access to the Debtors’ systems” after the commencement of Chapter 11 bankruptcy filings in the United States.

He called the allegations “extremely regrettable” for misrepresenting “the timely action taken by the Securities and Exchange Commission,” while defending all actions taken by the country’s regulator so far.

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The Bahamas has encouraged crypto companies to the island country to help its economy, but it is since it’s been shaken by the collapse of FTX.

It was also hit hard by Hurricane Dorian of 2019 and the COVID-19 pandemic that began in 2020 brought its heavily tourism-based economy to a halt. With FTX gone, so have many jobs in the small nation.

But Pinder expressed his belief that despite the “personal tragedies” associated with the FTX collapse, he expects “a little contagion beyond the realm of digital assets, both here in the Bahamas and around the world.”

He referenced the November 22 Standard & Poor’s ratings for the Bahamas which forecasted a stable outlook citing the performance of the tourism sector.

“Standards and Poor has projected a stable outlook for our economy that is based in part on the assumption that there will be no material adverse impact on the Bahamas from the global collapse of FTX,” Pinder said.