The jab is the latest in a series of back-and-forths between FTX’s new management and Bahamian authorities.
Following Sam Bankman-Frieds’ speedy exit, authorities in the Bahamas began investigating the collapse of the collapsed crypto exchange.
One measure taken was to freeze the assets of FTX Digital Markets – the Bahamian subsidiary of the company.
Speculation Not Welcome
In an address to the nation conducted via Facebook Live, Bahamas Attorney General and Minister of Legal Affairs Ryan Pinder praised the swift actions taken by the local regulators. He also cautioned would-be critics that the situation is not as simple as it seems and blaming Bahamas regulators for the meltdown would be a gross oversimplification of the matter.
“Any attempt to lay the entirety of this debacle at the feet of the Bahamas because FTX is headquartered here would be a gross oversimplification of reality. It is deeply misguided to conclude that reluctance to communicate the details of an active investigation means that nothing is happening.”
Timely Freeze of All Possible Assets
The Bahamas, whose GDP is largely made up of the countries’ strong off-shore banking sector, used its authorities’ experience in similar matters and immediately froze all possible assets of both FTX and FTX Digital Markets.
According to Pinder, the unique circumstances surrounding the meltdown pushed the authorities to skip the provisional liquidation step and take custody of the assets directly in order to ensure creditors and customers get as much of their money back as possible.
In response, FTX stated it had “credible evidence” that the Bahamian government is responsible for directing “unauthorized access” to their accounts in order to obtain the digital assets.
Naturally, this begs the question of why such a seizure would be necessary in the first place, which FTX is unlikely to answer.
Nevertheless, considering the words of FTX’s new CEO, John Ray III – who decried the lack of corporate oversight and due diligence regarding the firm’s assets – the measures taken by Bahamian authorities are prudent, to say the least.
There is also the matter of Kraken’s cooperation with the U.S. authorities. Following talks with regulators, the veteran exchange also froze accounts belonging to FTX and Alameda, along with wallets operated by the executives of the two firms.
For now, it is unclear how and when Bahamian authorities plan to reimburse FTX creditors. The restitution process will likely depend in part on the decision of U.S. authorities, who will begin holding hearings on FTX’s conduct shortly.