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Bahamas police investigating collapse of FTX


NASSAU, Bahamas, CMC -The Royal Bahamas Police Force has launched an investigation into the collapse of the Nassau-based FTX to determine if “any criminal misconduct occurred”, while the main opposition has called on the Phillip Davis administration “to outline to the public what financial exposures exist for the government”.

FTX moved its headquarters from Hong Kong to The Bahamas last year, with former chief executive officer, Sam Bankman-Fried, describing it as “one of the few places to set up a comprehensive framework for crypto” at the time.

Prices of digital currencies fell again as the crisis engulfing the market deepened over the weekend. Bitcoin, the world’s biggest cryptocurrency, has plummeted about 65 per cent so far this year. It was trading at about US$16,500 on Monday, according to CoinDesk.

The Bahamian police in a statement announced an investigation into FTX that had been backed by elite investors like BlackRock and Sequoia Capital, rapidly becoming one of the biggest crypto exchanges in the world.

“In light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets Limited, a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission (SEC) to investigate if any criminal misconduct occurred,” the Royal Bahamas Police Force said in a statement.

In addition to the SEC probe, the US Justice Department is also investigating FTX.

Media reports here said that FTX’s founder, Sam Bankman-Fried, is weathering the storm in The Bahamas, reportedly holed up at the luxury western New Providence community of Albany.

Last Friday, FTX filed for bankruptcy in the US. Its collapse was preceded by the decision to lend billions of dollars’ worth of customer assets to fund risky bets by Alameda, Bankman-Fried’s crypto hedge fund, The Wall Street Journal reported last Thursday.

The main opposition Free National Movement (FNM) has called on the government to provide the investing public with a “clear and cogent statement” regarding FTX.

FNM leader, Michael Pintard said the public needs to know what if any exposure exists for the government in view of the developments, and if there are any implications for the national budget.

In a statement, Pintard said the opposition is dismayed at the turn of events regarding the apparent collapse of FTX that held so much promise for the future of digital asset management in The Bahamas.

“We are all shocked by the daily revelations that are now becoming known nationally and internationally and call upon the government to provide the investing public a clear and cogent statement on the matter and the steps being taken to guard against the jurisdictional fall out and to shore up investor confidence,” Pintard said.

In July, Prime Minister Davis said his government was exploring the idea of establishing a carbon exchange with FTX, “where we will trade our carbon credits”.

But Pintard has raised concerns about the carbon credits in view of what has transpired with the company as well as the impact of FTX’s loss.

Pintard said the opposition continues to have complete faith in the Securities Exchange Commission and other relevant regulators to conduct a full and transparent investigation into what has gone wrong at FTX and to ensure that the public and investor interest is protected to the extent possible.

“In light of the fact that there are likely other companies operating in the digital assets space in this jurisdiction, what steps, if any, has the government taken to allay any concerns which may have arisen. Given the enormity of this situation and turn of events, there is an urgent need for the government to speak to this issue clearly and transparently,” Pintard said.


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