•The Bahamas Attorney General (AG) and Minister of Legal Affairs Ryan Pinder has confirmed that the collapsed crypto exchange FTX is the focus of an “active and ongoing” investigation by authorities from the Caribbean nation.
• In a national statement, Pinder explained the “affairs of FTX Digital Markets” are under scrutiny from both “civil and criminal authorities” and Bahamian authorities are working with “a number of specialists and experts.”
• The Securities Commission, financial intelligence unit, and financial crimes unit of the Royal Bahamas Police Force will continue to investigate potential violations of Bahamian law.
• Relevant Bahamian authorities would try to hold to account any companies or individuals found to have committed any wrongdoing during the investigation, while they will cooperate with other regulatory agencies and law enforcement bodies around the world.
The recent collapse of the crypto exchange FTX has caught the attention of Bahamian authorities. The Attorney General (AG) and Minister of Legal Affairs Ryan Pinder have confirmed that FTX is the focus of an “active and ongoing” investigation by authorities from the Caribbean nation. In a national statement, Pinder explained the “affairs of FTX Digital Markets” are under scrutiny from both “civil and criminal authorities” and Bahamian authorities are working with “a number of specialists and experts.”
Bahamas Securities Commission
The Securities Commission of the Bahamas is an independent statutory body charged with regulating and supervising the securities industry in The Bahamas. The Commission is also responsible for investigating and prosecuting offenses under the Securities Industry Act. In recent years, the Commission has been active in investigating potential violations of Bahamian law, including money laundering and terrorist financing. The Commission has also worked closely with the financial intelligence unit of the Royal Bahamas Police Force to investigate and prosecute financial crimes. In addition, the Commission has cooperated with the financial crimes unit of the United States Department of Justice to investigate and prosecute Bahamian nationals who have committed financial crimes in the United States. The Commission will continue to operate independently and to investigate potential wrongdoing in order to protect investors and ensure the integrity of the securities industry in The Bahamas.
The AG’s office has not yet released any details about the scope of the investigation, but it is likely that authorities are looking into whether FTX violated any laws or regulations in its operation. This is not the first time that FTX has been embroiled in controversy, as the exchange has been accused of market manipulation and other unethical practices in the past. However, if the AG’s office does find evidence of wrongdoing, it could pave the way for criminal charges against FTX and its executives.
FTX is a cryptocurrency derivatives trading platform that was founded in 2019 by Sam Bankman-Fried, who also serves as its CEO. The company is based in Singapore but also has offices in San Francisco, New York, Hong Kong, and Malta. As of February 2021, FTX was the fifth largest crypto derivatives exchange with $13 billion in daily trading volume.
FTX offers a wide range of products including futures, spot markets, leveraged tokens, and indices. It also has its own token, FTT, which is used to pay for fees on the platform and gives holders benefits such as reduced fees, early access to new products, and voting rights on platform decisions.
In mid-February 2021, FTX experienced a sudden surge in trading volume which caused liquidity issues on the platform. This led to a forced liquidation of around $700 million worth of positions and a flash crash in prices across all assets traded on FTX.
The problems at FTX come at a time when the crypto industry is already under intense scrutiny due to a number of high-profile hacks and scams. New regulations are being discussed or introduced in several countries in an attempt to bring more stability and transparency to the sector.