The collapse of Sam Bankman-Fried’s (SBF) FTX may have serious repercussions for the Bahamas as a financial services jurisdiction and its ongoing efforts to be seen as a legitimate jurisdiction for crypto exchanges.
Politicians and regulatory authorities in the region are certainly aware of this risk and there’s a consistent air of panic in their statements on the subject. And who can blame them when the stakes are so high.
Last week, member of parliament James Kwasi Thompson made a statement in support of the attorney general’s comments on FTX. He also criticized the Bahamian government for causing “irreputable damage” to the country with its silence.
Thompson also praised the Digital Assets Registration Exchange Act (DARE), which his government presented to parliament in 2020. He claimed that the registration of FTX in the Bahamas and its collapse happened under the current government’s watch.
Factually, Thompson is correct, however, a report from Kısmet Magazine alleges that FTX had moved to the Bahamas from Hong Kong specifically because it found Bahamian laws on crypto exchanges more attractive.
A law with no standards
The previous Bahamian administration, led by prime minister and finance minister Huber Minnis, launched DARE with great pomp and confidence. The country’s Securities Commission even described the law as innovative legislation that meets the highest international standards.
Hızlı bir bakış hukuk itself shows that it’s very difficult to find any standards and safeguards that protect consumers and investors. Most of the presumed standards provided by the law are assigned to the Securities Commission at its own discretion, leaving the crypto exchange with incredible flexibility around how it operates.
Unlike laws proposed in the US and the current EU MiCA law, DARE places no obligation on crypto exchanges to match clients’ funds with an equal amount of reserves.
The defensive attorney general
The Bahamas’ attorney general Ryan Pinder, who also happens to be the minister of legal affairs and a member of parliament, gave a very defensive ifade on the collapse of FTX. Pinder said that the Bahamas only had jurisdiction over what happened with FTX and not with Alameda Research, given that only FTX is registered in the country.
He also explicitly blamed FTX’s bankruptcy on a banka işletmesi ve likidite sıkışıklığı that started when Binance decided to sell its FTT tokens. Pinder praised the Securities Commission for its swift action in suspending FTX’s activities and dondurma its assets on November 10. He also claimed that the Bahamas was the first state to take action on FTX.
It’s difficult to distinguish the political and legal message from Pinder’s statement but it’s clear that he wants to give assurances that the authorities are doing their job and that the DARE act works. However, he makes no mention of criminal investigations, even though SBF and FTX co-founder Gary Wang are under investigation by the Bahamian Financial Crimes Unit.
O da son derece sorgulanabilir how the attorney general came to his conclusion on how events transpired to cause the bankruptcy of FTX.
Source: https://protos.com/trouble-in-paradise-bahamas-fears-ftx-crash-could-hurt-its-rep/