Bahamas couldn’t have prevented FTX collapse, prime minister says

The Bahamas couldn’t have prevented the failure of digital asset trade FTX and has discovered no “deficiencies” in its crypto laws, the nation’s prime minister advised parliament on Wednesday.

Philip Davis stated his nation didn’t have sole oversight of FTX’s worldwide operation and investigations into the collapse of Sam Bankman-Fried’s crypto empire can be of “nationwide significance”.

The failure of Bahamas-based FTX final week has left its purchasers dealing with probably big losses, whereas eroding market confidence and triggering fears that the collapse will unfold throughout the trade and engulf different main firms.

Authorities within the Caribbean nation, the place Bankman-Fried lived, are investigating FTX, which used its Bahamas base to construct a crypto derivatives buying and selling operation that accepted cash from hundreds of consumers world wide.

FTX was regulated by the Securities Fee of the Bahamas, and cited the island nation’s crypto-friendly regime as a cause for switching from Hong Kong final 12 months.

“Based mostly on the evaluation and understanding of the FTX liquidity disaster up to now, we have now not recognized any deficiencies in our regulatory framework that would have averted this,” Davis stated in ready remarks.

He added that the Bahamas securities regulator was capable of “take the instant steps” as a result of the nation already had a regulatory framework for digital property in place.

Davis stated that FTX-related probes “are to be of the very best order and given priority, given the quantities concerned and since dedicated and rigorous oversight is of nationwide significance. We will likely be co-ordinating these efforts with duly appointed authorities in different jurisdictions.”

FTX stated in courtroom filings it was in touch with US federal prosecutors, the nation’s most important securities and derivatives regulators and “dozens of federal, state and worldwide regulatory companies” because it and greater than 100 affiliated firms filed for Chapter 11 chapter in Delaware on Friday.

The securities fee within the Bahamas on Monday gained courtroom approval to nominate two companions from PwC, one based mostly within the Bahamas workplace and the second in Hong Kong, to supervise the unwinding of FTX Digital Markets.

Davis additionally advised these “who care about our nation’s repute, to tread fastidiously after they talk about issues which are very complicated and nonetheless unfolding . . . it is a story that has the world’s consideration, and those that use it to mislead and rating low-cost political factors aren’t any patriots”.

He added that he had each confidence that “the Bahamas will emerge from the proceedings involving FTX . . . with an enhanced repute as a strong digital asset jurisdiction”.