Bahamas’ Securities Commission Refutes Allegations From FTX Leaders

The new administration of now-bankrupt FTX under the leadership of John Ray III has not had it easy with the Securities Commission of The Bahamas (SCB).

Since the implosion of FTX and the resignation of Sam Bankman-Fried, the former Chief Executive Officer (CEO) of the crypto exchange, SCB has been at loggerheads with the exchange. This animosity has been pushed further into the new year.

According to a Twitter post by the regulator, the SCB is attempting to correct “material misstatements” by the new CEO John Ray III. 

After the liquidity crunch faced by FTX, the local regulator launched several probes into the activities of the Bahamian-headquartered crypto exchange. In one of its investigations, the Royal Bahamas Police Force mentioned suspected criminal misconduct on the part of the defunct exchange.

“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,” the Bahamas Police tweeted.

Several Implicating Statements Against Bahamas’ Regulator

Amidst all these investigations, Ray III made about three implicating statements concerning SCB. One of them stated that the regulator instructed that $300 million new FTT tokens be minted by FTX; another statement questioned the computation of the value of assets which was transferred to the SCB’s custody. Ray III’s leadership also suggested that the FTX assets held under the control of SCB were stolen.

In defense, the SCB said that the statement about minting $300 million worth of FTT stemmed from incomplete information and a lack of due diligence on the part of the debtors. These debtors were meant to request appropriate information from the Joint Provisional Liquidators to enable them to make informed statements. 

“The US Debtors’ continued lack of diligence when making public statement concerning the Commission is disappointing, and reflects a cavalier attitude towards the truth and towards The Bahamas that has been displayed by the current officers of the Chapter 11 Debtors from the date of their appointment by Sam Bankman-Fried,” the SCB announced

In terms of its calculation and the stolen assets, the Bahamas regulator reiterated that the allegations were aired “without providing any substantiated basis for such claims,” and were totally “unfounded.”