Bahamas Regulators Investigating FTX Client Withdrawals

Bahamas regulators’ investigation of the FTX Derivatives Exchange has heightened with discoveries coming to the limelight daily. Presently, the Bahamas authorities are trying to understand the role which FTX played, if any, in clients’ withdrawals that were performed after the assets of the exchange were frozen in the region. 

These regulators together with the financial crime policeman want to know if either Sam Bankman-Fried or Gary Wang had knowledge of the transactions or were even involved. Bankman-Fried has been interviewed several times at his Nassau residence in the Bahamas. 

Apart from the probes into the exchange’s executives, local authorities are trying to decipher the relationship between FTX.com, which is registered locally as FTX Digital Markets Ltd., and Bankman-Fried’s sister trading firm Alameda Research. These regulators are digging deep into the web to find a connection between both entities.

Bahamas Opens Series of Investigation on FTX

The Royal Bahamas Police Force together with the Securities Commission of the Bahamas opened an investigation into the misconduct done by FTX in the wake of the liquidity crunch.

“In light of the collapse of FTX globally and the provisional liquidations of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred.”

This was shortly after FTX claimed that the Bahamas HQ’s regulator instructed that FTX users in its region be allowed to withdraw their funds. In response, the Bahamas authorities denied ever giving out such instructions stating that it would never condone such preferential treatment for its residents.

Amidst all of these, the regulators froze assets that belong to both the crypto exchange and the former Chief Executive Officer (CEO) Bankman-Fried.

A provisional liquidator was also appointed before the exchange and its other 130 associates filed for bankruptcy in the United States. Although the bankruptcy filing did not include the local office in the Bahamas.

It wasn’t until mid-November before FTX Bahamas filed for a Chapter 15 bankruptcy in the United States as a foreign organization. Since the investigations, both Bankman-Fried and Wang have remained in the Bahamas. They are ongoing rumors that Bankman-Fried was arrested on Monday.