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- FTX is now under the scanner of Bahamian authorities.
- The crypto exchange shifted base to the islands last September.
- Bahamas is among the few countries which have successfully launched a CBDC.
Bahamian authorities begin investigating FTX
Sleuths from the Financial Crimes Investigation Branch are working with the Securities Commission of Bahamas to unearth any criminal misconduct that FTX may have engaged in.
The Securities Commission of Bahamas is the financial watchdog in the Bahamas, the equivalent of the Securities and Exchange Commission (SEC) in the U.S.A.
The financial watchdog via an order issued on Thursday froze FTX’s assets, suspended its operation registration and sought the Supreme Court of Bahamas’s intervention to appoint a liquidator.
Sam Bankman-Fried (a.k.a SBF) announced last September that the exchange had shifted base to the island nation from Hong Kong because of the regulatory clarity it offered. Also, the island nation already showed signs of being crypto-friendly – launched its own Central Bank Digital Currency (CBDC) in 2020.
SBF lives in the island with 9 other roommates. A wire news agency confirmed earlier that he had denied claims that he had relocated to Argentina via his private jet (a Gulfstream).
One of the biggest shocks to the industry
On November 11, FTX suspended withdrawals citing the lack of funds to service customer withdrawals. Many people reported on Twitter that their account balance showed zero balance. People accused SBF of lying and scamming them.
The FTX fiasco has shocked the industry and crypto enthusiasts. However, information regarding its financial dealings reveals that the crisis was bound to happen sooner if not too late. A leaked financial statement forced FTX’s competitor to dump all its FTT (the native token of FTX) holdings. When the competitor, which has now become the largest crypto exchange announced the decision to dump FTT and the reason to do so, people panicked. Soon, FTX plummeted from $20 to nearly $0 over the week.
In a veiled tweet, the CEO of the largest crypto exchange argued that SBF behaved in an unfair manner and so his exchange would not support those who hurt other industry players. Last year, this exchange decided to exit FTX, receiving payment partly in the exchange’s native token BNB and FTT. The now largest crypto exchange struck a deal to buy out FTX but pulled out of it a day before the scheduled data.
On the day FTX filed for chapter 11 proceedings, several wallets owned by FTX were emptied on Friday night. Funds were transferred from Tether to DAI, a stablecoin and from Staked Ethereum to Ethereum.
Industry stakeholders have reacted in several ways. Most were quick to warn people to pull out of FTX while others believe the fiasco might pave the way for greeter financial regulation.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
