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Bahamas Police Launch Investigation into FTX Conduct, Looking For ‘Criminal Misconduct’

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Sam Bankman-Fried. Source: a video screenshot, HBO / YouTube

Police in the Bahamas have launched an investigation into the crypto exchange FTX, and are actively looking for evidence of whether “criminal misconduct” has occurred.

Per a tweet from the Royal Bahamas Police Force published on Sunday, a team of financial investigators from the Force’s Financial Crimes Investigation Branch is already working with the nation’s financial regulator, the Securities Commission of The Bahamas.

The joint team’s aim is to “investigate if any criminal misconduct occurred,” the tweet said.

The statement from the Bahamas Police Force came in addition to a separate press release from the Securities Commission of The Bahamas this weekend on the situation surrounding FTX.

In the press release, the Securities Commission responded to widely shared public statements from FTX that it was facilitating withdrawals for Bahamian clients in order to comply with local regulations. According to the Securities Commission, however, instructions to prioritize withdrawals for Bahamian clients over others have never been given.

“[…] such transactions may be characterized as voidable preferences under the insolvency regime and consequently result in clawing back funds from Bahamian customers,” the statement said.

It went on to add that the Commission “does not condone the preferential treatment of any investor or client of FTX Digital Markets Ltd. or otherwise.”

The latest update from the financial regulator came after the same agency on November 11 said that it had “taken action to freeze assets” held by FTX and related parties.

The agency said at the time that it believed the freeze was “the prudent course of action” and was intended to stabilize the company and secure assets.

FTX filed for bankruptcy under Chapter 11 in the US state of Delaware on November 11. On the same day, FTX co-founder Sam Bankman-Fried stepped down as CEO of the company and was replaced by Chicago-based lawyer John J Ray III.