Securities Commission of The Bahamas Further Investigates FTX Crisis

According to the local newspaper Tribune, the problems at the FTX exchange are currently being investigated by the Bahamian regulator, the Securities Commission of the Bahamas.

This is owing to the fact that FTX Digital Market is an FTX unit licensed in the Bahamas under a newly enacted law that presents the Island nation as a financial center for digital asset companies.

Specifically, the FTX Digital Market is a Securities Commission licensee and Digital Assets and Registered Exchanges (DARE) Act registrant. The Securities Commission has been on a “very closely monitoring and investigating” situation with FTX since Binance walked away from its acquisition which was subjected to corporate due diligence.

The Bahamas has been advised to learn a few lessons from the FTX collapse event. Strengthening the DARE Act and the overall digital assets regulatory framework to avoid or mitigate the effect of a recurrence and enhance the protection of investors are some of the strategies which the Bahamian regulator has been urged to put in place.

Similarly, Binance Chief Executive Officer Changpeng Zhao had two lessons to point out to the global crypto industry from the collapse of FTX. According to Zhao, cryptocurrency companies should not utilize their own tokens as collateral and should also not borrow, instead, they should maintain “large reserves.”

FTX, SBF Goes Through Probes

Although many are of the opinion that the FTX crash will not take its toll on the Bahamas in the form of reputational damage or harm the plans of the nation to become a digital asset hub across the Caribbean and Latin America region in the near future. However, if FTX does not come out of this present situation, there might be some short-term impact on the nation.

While all these are going on, the Bahamian regulator also announced that it is freezing all of the exchange’s assets and appointing a provisional liquidator to oversee the process. Currently, the CEO of FTX, Sam Bankman-Fried is being probed by the United States Securities and Exchange Commission (SEC) for violating certain securities laws. 

The SEC claims that some of SBF’s moves pushed the exchange into its present liquidity crunch. Also, they are checking to discover a connection between the FTX exchange and other businesses owned and operated by Sam Bankman-Fried.