FTX under 'active' civil and criminal investigation: Bahamas AG

Bahamian Securities Commission, the Prime Minister’s financial intelligence unit, and a financial crimes unit are all involved in the FTX investigation.

View Details

The Bahamas Will Not Share Information on FTX Probe: Attorney General

<p>The <a href="https://www.financemagnates.com/tag/ftx/" target="_blank">FTX</a> debacle shook the priorities of the Bahamian authorities. The country's attorney general, Ryan Pinder, has defeated the actions of the "nation of laws" against the collapsed cryptocurrency exchange.</p><p>In a 23-minute pre-tapped speech released on YouTube, Pinder reiterated that the country would not share information on the ongoing civil and criminal investigation against FTX for fear of compromising them.</p><p>FTX moved its headquarters to The Bahamas in 2021, and its founder and former CEO, Sam Bankman-Fried, ran all operations from the island. Valued at $34 billion in its last funding round, the crypto exchange collapsed within days and the now under bankruptcy proceedings. The authorities in the Bahamas also opened an investigation against the exchange for any possible "criminal misconduct."</p><p>"It is important for me to share this summary of what took place, because, over the last few weeks, the basic facts have been obscured by guessing games and rumors," Pinder stated. "We understand the enormous interest in this story, but as a government, we decided right away that what was most important was not to engage with speculation or gossip, but instead to proceed methodically and deliberately in accordance with the exercise of due process and the rule of law."</p><p>A Messy Collapse</p><p>The Bahamas-registered entity of FTX also <a href="https://www.financemagnates.com/cryptocurrency/ftxs-bahamas-unit-applies-for-bankruptcy-protection-in-the-us/" target="_blank">filed for bankruptcy</a> in the United States. Meanwhile, the island's financial regulator suspended its license and <a href="https://www.financemagnates.com/cryptocurrency/the-bahamas-regulator-justifies-move-to-cease-local-ftx-clients-assets/" target="_blank">transferred the assets of local customers to government-controlled wallets</a> with a court order.</p><p>Pinder further reiterated that the newly appointed FTX CEO, John Ray III, who is overseeing the bankruptcy proceedings, "misrepresented" the actions of the Bahamas government. Ray earlier accused the Bahamas regulator of ordering "unauthorized" transactions. However, the Bahamas government maintained that it was for safeguarding the clients' funds.</p><p>"We urge all authorities here and abroad, at a minimum, to exercise at least the same amount of prudence and restraint in their public commentary as we do so as not to prejudice any of the proceedings that are ongoing," Pinder added.</p><p>"It is extremely regrettable that in chapter 11 filings for bankruptcy protection made in New York last week that the new chief executive of FTX Trading Limited – not the Bahamas-based FTX Digital Markets, but an affiliate company incorporated in Antigua and Barbuda – misrepresented the timely action taken by the Securities Commission and used inaccurate allegations lodged in the transfer motion they had filed to do so."</p><p>Pinder's attempt with the speech looks to justify the actions of the Bahamas authorities against collapsed FTX and also ensure that the island is suitable for businesses and tourism.</p><p>Meanwhile, the regulators of <a href="https://www.financemagnates.com/cryptocurrency/ftxs-cysec-license-suspension-likely-to-start-wider-regulatory-audits/" target="_blank">Cyprus</a> and <a href="https://www.financemagnates.com/cryptocurrency/asic-suspends-ftxs-afs-license/" target="_blank">Australia</a> also suspended the license of local FTX entities, whereas the Monetary Authority of Singapore clarified that it <a href="https://www.financemagnates.com/cryptocurrency/singapores-mas-ftx-not-licensed-protection-of-local-users-impossible/" target="_blank">not regulating FTX</a> and thus protecting local customers would be impossible.</p> This article was written by Arnab Shome at www.financemagnates.com.

View Details

The Bahamas Regulator Justifies Move to Cease Local FTX Clients' Assets

<p>The Securities Commission of The Bahamas on Wednesday released a statement justifying its move to cease the customer assets of the local <a href="https://www.financemagnates.com/tag/ftx/" target="_blank">FTX</a> entity, FTX Digital Markets Ltd (FDM). It came after several questions were raised against the action of the Bahamian regulator.</p><p>"It is unfortunate that in Chapter 11 filings, the new CEO of FTX Trading Ltd. misrepresented this timely action through the intemperate and inaccurate allegations lodged in the Transfer Motion," the regulator stated.</p><p>"It is also concerning that the Chapter 11 debtors chose to rely on the statements of individuals they have (in other filings) characterized as unreliable sources of information and potentially "seriously compromised."</p><p>The Bahamas financial market watchdog gained a court order on November 12 to make the collapsed cryptocurrency exchange <a href="https://www.financemagnates.com/cryptocurrency/the-bahamas-regulator-orders-ftx-to-transfer-cryptos-to-government-wallets/" target="_blank">transfer local customers' digital asset to government-controlled wallets</a> for 'safekeeping.'</p><p>"Given the nature of digital assets and the risks associated with hacking and compromise, the Commission determined that placing FDM into liquidation was not sufficient to protect the customers and creditors of FDM," the regulator added.</p><p>Further, the cyberattack on FTX, resulting in the theft of at least $1 billion in cryptocurrencies, justified the regulator's move.</p><p>The Collapse</p><p>FTX, valued at $34 billion in the last funding round, collapsed earlier this month. Several misdeeds of its founder and former CEO, Sam Bankman-Fried surfaced over the weeks - he reportedly used client deposits. He created a complex loan structure with sister entities backed by the native exchange token, FTT.</p><p>FTX.com, FTX US, Alameda Research, and over 130 other affiliates filed for Chapter 11 bankruptcy proceedings in Delaware. The Bahamian entity also <a href="https://www.financemagnates.com/cryptocurrency/troubled-ftx-files-for-bankruptcy-as-ceo-bankman-fried-resigns/" target="_blank">filed for bankruptcy</a>, but Chapter 15 protection in a New York court. The liquidators of FTX now agreed to move the proceedings of FTX's Bahamas entity to Delaware.</p><p>"The Commission will continue to evaluate the situation, continue to act in accordance with directions issued by the Supreme Court of The Bahamas, collaborate with other supervisory authorities, and take such further actions as needed to preserve the assets of FDM and to safeguard the interests of customers and creditors of FDM," the Securities Commission of The Bahamas added.</p><p>"In addition, the Commission will continue to investigate the facts and circumstances regarding FTX's liquidity crisis and any potential violations of Bahamian law and hold any responsible companies and individuals accountable, in cooperation with other regulatory agencies and law enforcement both in The Bahamas and in other affected countries in connection with their own investigations."</p><p>The scale and impact of the collapse of FTX also prompted other global regulators to clarify their situation. The Monetary Authority of Singapore recently clarified that <a href="https://www.financemagnates.com/cryptocurrency/singapores-mas-ftx-not-licensed-protection-of-local-users-impossible/" target="_blank">FTX is not regulated under its jurisdiction</a>, and thus the protection of its local clients is impossible.</p> This article was written by Arnab Shome at www.financemagnates.com.

View Details

Recent FTX hacks prove it was right to ‘secure’ its assets: Bahamian regulator

The Securities Commission of The Bahamas said the continued hacking attempts on FTX prove it made the right call to "secure" FTX's digital assets.

View Details

SBF’s Parents Joined FTX $121M Bahamas Property Splurge: Reuters

The source of the funds FTX and its team members used to buy the properties is unclear. FTX Settles in The Bahamas FTX and some of the key figures within...

View Details

The Bahamas Regulator Orders FTX to Transfer Cryptos to Government Wallets

<p>On Thursday, the Securities Commission of the Bahamas said that it has ordered the transfer of all digital assets held by FTX Digital Markets Ltd (FDM) to a government-controlled wallet for 'safekeeping'. The order was issued last Saturday.</p><p>"The Securities Commission of The Bahamas ('the Commission'), in the exercise of its powers as regulator acting under the authority of an Order made by the Supreme Court of The Bahamas, took the action of directing the transfer of all digital assets of FTX Digital Markets Ltd. ('FDM') to a <a href="https://www.financemagnates.com/terms/d/digital-wallet/" target="_blank" id="e60f0258-6b28-43b3-ba33-c1e503ce28fb_1" class="terms__main-term">digital wallet</a> controlled by the Commission, for safekeeping," the regulator stated in the press release.</p><p>"Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM."</p><p>The Commission did not explain why it announced the order publicly after five days or provide any details about the transfer.</p><p>Another announcement by the Bahamian regulator last Saturday clarified that it did not order <a href="https://www.financemagnates.com/tag/ftx/" target="_blank">FTX</a> to resume withdrawals for the residents of the islands, contradicting previous claims of the collapsed crypto exchange.</p><blockquote class="twitter-tweet"><p lang="en" dir="ltr">2) The amounts withdrawn comprise a small fraction of the assets we currently hold on hand and we are actively working on additional routes to enable withdrawals for the rest of our userbase. We are also actively investigating what we can and should do across the world.</p>— FTX (@FTX_Official) <a href="https://twitter.com/FTX_Official/status/1590783570989441024?ref_src=twsrc%5Etfw">November 10, 2022</a></blockquote><p>Jurisdictional War?</p><p>FTX Digital Markets Ltd, operated as FTX.com, was headquartered in The Bahamas. The global crypto exchange, its US subsidiary, Alameda Research, and about 130 other affiliates filed for <a href="https://www.financemagnates.com/terms/b/bankruptcy/" target="_blank" id="41b3ef0d-d805-441d-8443-121890264e94_1" class="terms__secondary-term">bankruptcy</a> in the United States on November 11. Interestingly, the Bahamas-based exchange unit <a href="https://www.financemagnates.com/cryptocurrency/ftxs-bahamas-unit-applies-for-bankruptcy-protection-in-the-us/" target="_blank">filed for Chapter 15 bankruptcy protection</a> in a New York district court, whereas the other entities sought <a href="https://www.financemagnates.com/cryptocurrency/troubled-ftx-files-for-bankruptcy-as-ceo-bankman-fried-resigns/" target="_blank">Chapter 11 bankruptcy protection</a> in Delaware.</p><p>The latest announcement by the Bahamas financial market watchdog indicates a tussle between the authorities in the United States and the Bahamas for jurisdictional claims over the collapsed crypto exchange, FTX.</p><p>Meanwhile, the collapsed cryptocurrency exchange was <a href="https://www.financemagnates.com/cryptocurrency/ftx-hacked-1bn-drained-from-ftx-and-ftx-us-accounts-so-far/" target="_blank">hacked</a> last weekend, draining nearly a billion dollars worth of cryptocurrencies to hacker-controlled wallets.</p><p>FTX grew fast before it collapsed to rubble. The exchange was valued at $34 billion in its last funding round, attracting funds from major venture capitals. <a href="https://www.financemagnates.com/cryptocurrency/singapores-temasek-writes-off-275-million-ftx-investment/" target="_blank">Temasek</a>, Sequoia Capital and Soft Bank's Vision Fund wrote off hundreds of millions of dollars of their investment into the collapsed crypto exchange.</p> This article was written by Arnab Shome at www.financemagnates.com.

View Details

Bahamas Regulators Appoint FTX Unit Liquidators

Members of the accounting auditing firm PwC will be in charge of liquidating assets to guarantee interests of exchange's clients.

Continue reading Bahamas Regulators Appoint FTX Unit Liquidators at DailyCoin.com.

View Details

3 key crypto price events to watch in the wake of the FTX and Alameda debacle

FTX and Alameda’s Ponzi-like trading scheme has dealt a heavy blow to the entire crypto industry. Here are three developments to keep a close eye on.

View Details

The Bahamas Freeze FTX.com Assets, Japan Halts Local Operation

<p>The financial market regulator of the Bahamas has frozen the assets of “FTX Digital Markets and related parties” following the stunning collapse of Sam Bankman-Fried’s <a href="https://www.financemagnates.com/terms/c/cryptocurrency-exchange/" target="_blank" id="601e2e5f-0c28-4253-9ad4-5e6b251ba2fa_1" class="terms__secondary-term">cryptocurrency exchange</a>, FTX.com.</p><p>In a press release on Thursday, the Securities Commission of the Bahamas called the move a “prudent course of action” to “preserve assets and stabilize the company.” The regulator also appointed a provisional liquidator.</p><p>FTX Digital Markets is the Bahamian subsidiary of FTX Trading and operates as the global crypto <a href="https://www.financemagnates.com/terms/t/trading-platform/" target="_blank" id="f85800b2-ccf5-4f50-9e8e-780d32afc6f6_1" class="terms__main-term">trading platform</a>, FTX.com. The exchange is headquartered in the Bahamas, but it is a separate entity from the US-based FTX.US, which, at the moment, is not affected by the troubled FTX.com.</p><p>“The commission is aware of public statements suggesting that clients’ assets were mishandled, mismanaged and/or transferred to Alameda Research. Based on the commission’s information, any such actions would have been contrary to normal governance, without client consent and potentially unlawful,” the Bahamian regulator stated.</p><p>The troubles of FTX.com started last weekend, and the exchange is now on the brink of collapse. Though rival Binance initially offered to acquire <a href="https://www.financemagnates.com/cryptocurrency/ftx-the-rise-the-fall-and-the-reaction/" target="_blank">FTX</a> fully, it <a href="https://www.financemagnates.com/cryptocurrency/binance-pulls-out-of-ftx-acquisition-crypto-chaos-ensues/" target="_blank">backed out</a> within a day, citing “reports regarding mishandled customer funds and alleged US agency investigations.”</p><p>Now, the exchange needs to cover a shortfall of $8 billion and is not processing the majority of withdrawal requests. Bankman-Fried is now <a href="https://www.financemagnates.com/cryptocurrency/ftx-opts-for-capital-raise-as-alameda-research-winds-down-on-trading/" target="_blank">opting to raise capital</a>.</p><p>Crackdown by Japan</p><p>Meanwhile, the Bahamas is not the only regulator to take direct action <a href="https://www.financemagnates.com/tag/ftx/" target="_blank">against FTX</a>. Japan’s Kanto Local Finance Bureau also ordered the local subsidiary of FTX to suspend operations until 9 December. Additionally, the Asian regulator asked the exchange to submit a business improvement plan by 16 November.</p><p>Japanese regulations mandate that crypto exchanges must separate client funds from their own assets. However, the suspension of withdrawals by FTX shows that it did not follow all the necessary domestic requirements.</p><p>“We need to do everything possible to protect the interests of FTX Japan’s users,” Japan’s Finance Minister, Shunichi Suzuki said on a Friday news briefing. “It is extremely regrettable that the situation has come to this.”</p><p>In the United States, there are reports of the Securities and Exchange Commission and the Department of Justice opening an investigation against the troubled cryptocurrency exchange. However, those actions have yet to be officially confirmed.</p> This article was written by Arnab Shome at www.financemagnates.com.

View Details

Crypto Exchange FTX Relocates its HQ to the Bahamas from Hong Kong

Digital assets derivatives exchange FTX reportedly has relocated their headquarter to Nassau, the Bahamas, from Hong Kong, citing fewer regulation restrictions on the island nation. (Read More)

View Details

FTX’s Sam Bankman-Fried Battles US Post-Extradition Charges in Bahamas

Sam Bankman-Fried, the disgraced founder of bankrupt cryptocurrency exchange FTX, has made a move to dismiss the charges slapped on him by US prosecutors after his extradition from the Bahamas, Reuters reported on Tuesday. The former crypto billionaire’s lawyers have asked the Supreme Court of the Bahamas to stop the island’s country’s government from consenting to the post-extradition charges.

Bankman-Fried Moves against US Charges

According to the wire agency, Bankman-Fried’s lawyers disclosed the move in documents filed before a federal court in Manhattan, United States, on Monday evening. The lawyers are arguing that the extra charges contravene the terms of extradition agreement between Bahamas and the United States. The extradition treaty between both countries requires the country releasing a defendant to give its consent before additional charges can be initiated after the extradition.

Bankman-Fried was arrested in the Bahamas in late 2022 over the collapse of FTX after criminal charges were filed against him in the United States. He was later extradited to the US where he was initially charged with eight counts, including conspiracy to commit wire and securities fraud, money laundering and conspiracy to avoid campaign finance regulations.

However, prosecutors have since expanded the charges to 13, including conspiracy to commit bank fraud and violate the anti-bribery provisions of the United States by bribing Chinese officials in late 2021. However, Bankman-Fried lawyers in the new court filings said they intend to contest the extra charges in Bahamas court should the island country’s government consent to the charges, Wall Street Journal (WSJ) reported.

The lawyers also asked US District Judge Lewis Kaplan to throw out the changes or try them separately from the FTX founder’s trial scheduled for October 2, 2023.

“Mr. Bankman-Fried will suffer if required to prepare for a trial that is less than four months away without knowing whether he will be tried on nearly half of the counts,” the lawyers said in the filing, as quoted by WSJ.

In May, the US Justice Department said it would drop some of the charges against Bankman-Fried if the Bahamas does not consent to them. However, the prosecutors last month slammed pre-trial motions filed by Bankman-Fried’s lawyers to dismiss a number of the 13 charges against him.

FTX crumbled in November last year after a liquidation crisis, costing billions of dollars in losses to investors.

BidFX hires eFX expert; Orbex's prepaid card; read today's news nuggets.

View Details