Bahamian Authorities Confirm FTX is Under ‘Active’ Investigation, Prime Minister’s Financial Intelligence Unit Involved

Source: AdobeStock / Ruth P. Peterkin

As FTX’s bankruptcy proceedings continue to ravage through the crypto markets, the authorities of the Bahamas, where the exchange is headquartered, are investigating the activities of the collapsed business, according to Ryan Pinder, the nation’s attorney general and Minister of Legal Affairs. 

In what he called a national statement on behalf of the Bahamas government, the politician said the Bahamas Securities Commission, Financial Intelligence Unit and the police's Financial Crimes Unit are advancing their investigation of "the facts and circumstances regarding FTX's insolvency crisis, and any potential violations of Bahamian law."

“Tonight, while I speak on behalf of the government, it is, in fact, the Securities Commission of the Bahamas that is the lead actor in respect of the present situation as they are the statutory regulator of companies like FTX,” according to Pinder. 

A large portion of the official’s speech was devoted to the defense of the nation’s crypto-related regulations, signaling that, in the aftermath of the major exchange’s collapse, the cabinet was not considering to introduce significant changes to its regulatory framework. The attorney general emphasized that, from his point of view, the company’s management was to be blamed for the resulting crisis. 

“While cryptocurrency and digital assets are part of a new and complex industry, on a basic level, recent events involving the insolvency crisis involving the FTX group of companies have been experienced around the world,” Pinder said. “To that extent, what happened can be more readily understood as a case of a very large business failure and a result of very questionable management practices and corporate governance.”

The minister also said he believed the ongoing crypto market downturn would eventually end, returning the industry to a growth path. 

“Like the dot com boom and bust of the past, we believe that the turbulence currently being experienced by the digital assets sector will pass, and that there is still much potential and opportunity ahead,” according to Pinder. 

Meanwhile, FTX’s legal woes also continue in the US as recently revealed information suggests Sam Bankman-Fried’s company was on the radar of federal prosecutors long before it filed for bankruptcy. 

The US Attorney’s Office for the Southern District of New York, led by U.S. attorney Damian Williams, spent several months on an examination of crypto exchanges that maintain US and foreign-based operations. As part of these proceedings, Manhattan prosecutors had started to investigate FTX’s massive exchange operations, according to persons familiar with the proceedings. 

The available information suggests American prosecutors are particularly interested in probing FTX’s compliance with the country’s Bank Secrecy Act. The legislation introduces anti-money laundering measures in the US by requiring financial industry players to maintain records and submit reports for the purpose of tax, criminal, and regulatory matters.