FTX Under Investigation in the Bahamas
It seems that the FTX saga is going to unfold for a long time to come. After suffering a liquidity crisis and halting customer withdrawals, the embattled exchange reported a wallet hack that lost millions of dollars, leading to a bankruptcy filing. Now, its new management is looking into existing funds and how FTX can potentially make a comeback.
But even with its current bankruptcy filing, FTX is still facing a plethora of legal issues. Just recently, authorities in its Bahamian base have announced that the exchange is under investigation. This comes amid accusations of mismanagement by the exchange’s former executives as well as ongoing speculation of the whole saga being an elaborate exit scheme by former CEO Sam Bankman-Fried.
Details About the Investigation
Once the news about FTX’s situation was made public, Bahamian authorities responded and began looking into the exchange, especially given that it is based on the island. This swift response was noted by Bahamian Attorney General Ryan Pinder in a November 27, 2022 statement about the situation.
Pinder also confirmed that not only was the investigation still ongoing but that it involved both civil and criminal authorities.
“We are in the early stages of an active and ongoing investigation. It is a very complex investigation,” he said, adding that the Bahamas Securities Commission, Financial Intelligence Unit and the police’s Financial Crimes Unit were all involved in the case.
As the FTX saga has unfolded, there has been the narrative in some circles that the exchange was able to get away with mismanagement because it was based in the Bahamas. This is a narrative that Attorney Pinder has been quick to debunk, revealing that FTX’s license was revoked in the Bahamas even before the company filed for bankruptcy in the US.
“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,” he said.
The FTX saga has been one of the biggest collapses in the crypto industry so far. Currently, the money owed by the exchange is pegged at around $3.1 billion to just its top 50 biggest creditors. And this is besides the estimated 1 million creditors that FTX has in total.
FTX Under Investigation Around the World
And the Bahamas is not the only country that is investigating FTX for its activities. Just last week, Turkish authorities announced that it has seized several assets associated with FTX and its former CEO.
“As a result of our aforementioned application, a judicial investigation was opened against the suspects and a confiscation measure was applied to the assets of the suspects,” a statement from the authorities said.
And we can expect a lot more investigations to be announced. Because of how big FTX was, it had dozens of arms in dozens of countries, all of which have been affected by the collapse. Naturally, regulators in these multiple countries will be looking more closely into the various arms.