Crypto exchange FTX against the Bahamas

Less than a month ago, news had leaked that Bahamian government authorities in collaboration with the former CEO of crypto exchange FTX had attempted to create new tokens worth hundreds of millions of dollars. 

The news has obviously created a legal dispute between the United States and the state of the Bahamas. From what has transpired, Bahamian authorities were in contact with Sam Bankman Fried with the goal of transferring these new tokens under the control of island officials. 

However, today 3 January saw the arrival of denials from the island of the Bahamas, denying that they had ever been in contact with the former CEO of FTX and that they had never requested the issuance of any crypto tokens. 

Why did the collapse of crypto exchange FTX put the Bahamas in crisis?

In April 2022, Sam Bankman Fried, together with his management team decided to move to the island of the Bahamas and turn the Caribbean island into his headquarters. The promises were many, a digital revolution of the island’s finances, a futuristic step that would radically change the island. 

Hence, at this point the Bahamas simply went along with the ideas of what at first glance seemed like a digital genius, investing much of their finances in the digital asset market, focusing their economic strategy on cryptocurrencies. 

Only seven months after the fall of FTX, Sam Bankman Fried’s bankruptcy marked not only the end of his company, but a major crisis for a country and a people, the Bahamas.

The socio-economic impact was devastating for the citizens, who were shocked by such an immediate collapse of a company that on the surface seemed so important. It is safe to say, without mincing words, that FTX had become an integral part of the Bahamian community, the idea of a digital revolution that enticed the entire country.

Sam Bankman Fried and his management team were important figures in the island community, it is enough to consider that they spent about $300 million on real estate in the Bahamas, which of course is currently unused. 

The company hired a great many island residents and citizens, convincing them to invest their savings precisely in FTX. Today the dream of a digital revolution has faded and the island is paying the price. 

Bahamas denies call for the issuance of new FTT

As mentioned at the beginning, Bahamian authorities have sternly denied that they were in contact with Sam Bankman Fried to have him issue new FTT tokens and deliver them to island officials. The investigation carried out by the United States according to the Securities Commission of The Bahamas (SCB) has been obstructed. 

According to a statement released by the Securities Commission of The Bahamas (SCB) a few hours ago, the island authorities had to correct material misstatements of Chapter 11 debtors written by FTX CEO John J Ray III.  

The SCB claimed that these statements were based on incomplete information and that the debtors did not do their due diligence by requesting information from the joint provisional liquidators. 

The situation is very delicate, the statements of FTX’s new CEO, who is in charge of restoring the company’s debts, do not go hand in hand with those of the Bahamian island authorities.

The goal of both, however, is the same, which is to restore FTX’s debts and compensate the amount owed, or at least a small portion to those who lost money during the exchange’s collapse. 

For the time being, it is not known how they will proceed with regard to the Bahamian island charges; denials by SCB authorities will no doubt have to be followed by concrete evidence.