FTX Management Misrepresented Bahamas Authorities’ Actions, Says AG

Following Sam Bankman-Frieds’ speedy exit, authorities within the Bahamas started investigating the collapse of the collapsed crypto alternate.

One measure taken was to freeze the property of FTX Digital Markets – the Bahamian subsidiary of the corporate.

Hypothesis Not Welcome

In an handle to the nation carried out by way of Fb Reside, Bahamas Legal professional Normal and Minister of Authorized Affairs Ryan Pinder praised the swift actions taken by the native regulators. He additionally cautioned would-be critics that the scenario isn’t so simple as it appears and blaming Bahamas regulators for the meltdown could be a gross oversimplification of the matter.

“Any try to put the whole thing of this debacle on the ft of the Bahamas as a result of FTX is headquartered right here could be a gross oversimplification of actuality. It’s deeply misguided to conclude that reluctance to speak the main points of an lively investigation signifies that nothing is going on.”

Well timed Freeze of All Attainable Property

The Bahamas, whose GDP is basically made up of the international locations’ sturdy off-shore banking sector, used its authorities’ expertise in comparable issues and instantly froze all attainable property of each FTX and FTX Digital Markets.

In response to Pinder, the distinctive circumstances surrounding the meltdown pushed the authorities to skip the provisional liquidation step and take custody of the property immediately as a way to guarantee collectors and clients get as a lot of their a refund as attainable.

In response, FTX said it had “credible proof” that the Bahamian authorities is accountable for directing “unauthorized entry” to their accounts as a way to receive the digital property.

Naturally, this begs the query of why such a seizure could be needed within the first place, which FTX is unlikely to reply.

However, contemplating the phrases of FTX’s new CEO, John Ray III – who decried the dearth of company oversight and due diligence relating to the agency’s property – the measures taken by Bahamian authorities are prudent, to say the least.

There’s additionally the matter of Kraken’s cooperation with the U.S. authorities. Following talks with regulators, the veteran alternate additionally froze accounts belonging to FTX and Alameda, together with wallets operated by the executives of the 2 corporations.

For now, it’s unclear how and when Bahamian authorities plan to reimburse FTX collectors. The restitution course of will probably rely partially on the choice of U.S. authorities, who will start holding hearings on FTX’s conduct shortly.

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