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As of Thursday, November 17, 2022
By LEANDRA ROLLE
Tribune Staff Reporter
AFTER the collapse of FTX, Prime Minister Phillip “Brave” Davis said he has ordered that local investigations be of the highest order and given precedence, adding that investigations will be a coordinated effort with “duly appointed authorities” in other jurisdictions.
He also said government officials have not identified any deficiencies in the nation’s regulatory framework that could have prevented FTX’s implosion.
“As you know, the FTX group has one entity which is regulated in The Bahamas, FTX Digital Markets Limited,” Mr Davis revealed in the House of Assembly yesterday in his first public remarks on the ongoing saga.
“This entity’s registration has been suspended and it was put in provisional liquidation.The FTX group and affiliates all now appear to be subject to insolvency proceedings pending in Nassau and in the United States.“
This comes as local and international investigations continue into the embattled cryptocurrency exchange following reports that it mishandled customers’ funds.A bipartisan hearing into matters related to FTX is set to take place in the US next month.
The hearing was announced in a statement released yesterday from the US House Financial Services Committee, whose chairwoman is Congresswoman Maxine Waters.
The body will be hearing testimony from all individuals and companies involved with FTX’s fall out, including FTX founder Sam Bankman-Fried – who has since resigned as CEO of the company and committed himself to doing right by his customers in the aftermath of the company’s collapse.
Meanwhile, local regulators last week moved to protect clients of The Bahamas’ flagship crypto currency investor by “freezing” its assets and just recently received court approval to appoint joint provisional liquidators.
“There are reports that FTX has mismanaged customer assets, and numerous investigations have begun into the reported actions and actors in several countries, including by our own Securities Commission and the Financial Crimes Investigation Branch,” Mr Davis continued.
“I note that The Bahamas did not have sole oversight of FTX’s worldwide operation.I have given directions that these proceedings and investigations are to be of the highest order and given precedence, given the amounts involved and because committed and rigorous oversight is of national importance.
“We will be coordinating these efforts with duly appointed authorities in other jurisdictions.”
Mr Davis explained that there have been “booms and busts” in the crypto world and even pointed to several crypto tokens and global companies that have suffered similar fates over the last several months.
The prime minister also addressed concerns about the future of the nation’s digital asset management sector in view of FTX’s collapse, insisting that he had every confidence The Bahamas will emerge from proceedings related to FTX with an enhanced reputation as a solid digital assets jurisdiction.
He also noted that based on analysis of the crisis, government officials have not identified any deficiencies in the nation’s regulatory framework that could have avoided the current situation.
“In fact, it was because The Bahamas already had in place a regulatory framework for digital assets and digital asset businesses, that the regulator was able to take immediate steps in order to protect the interests of clients, creditors, and other stakeholders globally,” Prime Minister Davis also said.
“The Bahamas was already on track to update the regulatory framework before year’s end, to address lessons learned as a result of this year’s crypto winter.”
“No doubt, as the various jurisdictions involved unravel the actions that led to this moment, we will be among the first jurisdictions to gain and put to use valuable insights, allowing us to further strengthen our framework.”
Mr Davis also asked “those who care about our country’s reputation” to tread carefully when speaking about matters related to FTX, saying the situation was “very complex and still unfolding.”
Responding to Mr Davis’ communication, Free National Movement Leader and Marco City MP Michael Pintard told parliamentarians that he was stunned “at the brevity and to a large extent, the hollowness” of the prime minister’s remarks on FTX’s collapse.
He added: “We are facing a substantial risk to our financial services sector and one would’ve expected that since the international community’s eyes are trained on the Commonwealth of The Bahamas that on this occasion that this Davis-Cooper administration would’ve thought it necessary to break its silence much earlier with a far more comprehensive statement given the gravity of this.”
However, Mr Davis, rising on a point of order, called for Mr Pintard to listen carefully to what he had actually said.
“When the facts are unfolding, you don’t jump ahead of yourself to make these cheap political shots,” he stressed.
“Understand what the facts are, they are still unfolding – and you have to be careful with what you’re saying because the matter is still before the courts so I try to be as sanguine as possible so as not to say that I am influencing the procedures going on at the court.That’s why brevity.That’s why I just settled to say the facts and that’s what responsibility says on my part.”
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