Bahamas has a ‘active’ civil and criminal investigation into FTX

The FTX investigation involves the Bahamas Securities Commission, the Prime Minister’s financial intelligence unit, and a financial crimes unit.

The Bahamas Attorney General (AG) and Minister of Legal Affairs, Ryan Pinder, has confirmed that the Caribbean nation’s authorities are conducting a “active and ongoing” investigation into the defunct crypto exchange FTX.

Pinder explained in a national statement delivered live on the Office of the Prime Minister’s Facebook page on Nov. 27 that the “affairs of FTX Digital Markets” are being investigated by both “civil and criminal authorities,” and that Bahamian authorities are working with “a number of specialists and experts and will continue to do so as the need arises.”

Pinder also stated that the relevant Bahamian authorities would attempt to hold accountable any companies or individuals found to have committed any wrongdoing during the investigation, while cooperating with other regulatory and law enforcement bodies around the world.

On November 10, the Bahamas Securities Commission suspended FTX Digital Markets’ (FDM) license to conduct business and stripped its directors of their authority.

On November 12, they ordered the transfer of all FDM digital assets to the commission’s digital wallet for “safekeeping.”

Pinder stated that the country’s regulatory authority has implemented additional safeguards 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 used the opportunity to criticize FTX Trading Limited’s Nov. 17 emergency motion, which accused the “Bahamian government” of “directing unauthorized access to the Debtors’ systems” following the start of Chapter 11 bankruptcy filings in the United States.

He described the allegations as “extremely regrettable” for misrepresenting “the timely action taken by the Securities Commission,” while also defending all of the country’s regulator’s previous actions.

The Bahamas has encouraged crypto companies to come to the island country to help its economy, but the collapse of FTX has shaken the country.

It was also hard hit by Hurricane Dorian in 2019, and the COVID-19 pandemic, which began in 2020, brought its heavily tourism-based economy to a halt. Many jobs in the small country have been lost as a result of the demise of FTX.

Despite the “personal tragedies” associated with FTX’s demise, Pinder believes there will be “little contagion beyond the digital asset sphere both here in the Bahamas and around the world.”

He cited a Nov. 22 Standard & Poor’s rating for The Bahamas, which predicted a stable outlook based on the performance of the tourism sector.