Cooper confident in local regulators as FTX fallout reverberates

Deputy Prime Minister Chester Cooper yesterday expressed confidence in The Bahamas’ financial services laws following the collapse of the Bahamas-headquartered crypto currency giant FTX.

“Let me say that the prime minister will be speaking to the FTX matter,” Cooper told reporters before the weekly Cabinet meeting.

“It’s in his remit as minister of finance. It’s a matter for the regulators. I can tell you though that I am confident about the regulators. I’m confident about the laws governing financial services in The Bahamas.

“We’ve had curveballs thrown at us before in financial services and we persevered. We’ve pivoted in financial services many times and I expect that we’re going to do likewise in the digital assets business.”

US politicians and businesspeople have started to comment on The Bahamas’ regulatory 

framework and whether more could have been done here to mitigate the collapse, which will likely affect tens of thousands of US crypto wallet holders who traded on FTX.

Referring to potential fallout from the FTX saga, Cooper assured that The Bahamas has “a very good brand” internationally in relation to its financial services.

He expressed confidence that “we are going to pivot appropriately and we will preserver”.

Though he previously lauded FTX, which filed for bankruptcy in the United States last week, Prime Minister Philip Davis has yet to comment on the multi-billion-dollar crypto exchange’s fall.

Davis was attending COP27 in Egypt when news of the ultimate collapse of the company started to break in international media after it was announced that then FTX CEO Sam Bankman-Fried called Binance owner Changpeng Zhao, also known as CZ, for a bailout after there was a run on FTX’s token FTT that left FTX in a liquidity crisis.

Binance, the world’s largest cryptocurrency exchange, later revealed that it would not make good on its conditional intent to bail out FTX.

On Thursday, the Securities Commission of The Bahamas (SCB) announced that it had frozen the assets of FTX Digital Markets after it became aware of public statements suggesting that the Bahamas-headquartered FTX mishandled client assets and “mismanaged and/or transferred (assets) to Alameda Research”, which is FTX’s supposed “sister” company in the United States.

It said it has appointed a provisional liquidator.

In a statement released late-Monday night, SCB said the Supreme Court had approved Kevin Cambridge and Peter Greaves of PricewaterhouseCoopers (PwC) as joint provisional liquidators.

“Given the magnitude, urgency, and international implications of the unfolding events with regard to FTX, the commission recognized that it had to, and moved swiftly to use its regulatory powers under the Digital Assets and Registered Exchanges Act, 2020 to further protect the interests of clients, creditors, and other stakeholders globally of FTX Digital Markets Ltd.,” it said.

“Over the coming days and weeks, the commission expects to engage with other supervisory authorities on a regulator-to-regulator basis as this event is multi-jurisdictional in nature.

“The commission is the lead authority in The Bahamas conducting the investigations into the events and parties, including, but not limited to, FTX Digital Markets Ltd. (a regulated entity), FTX Trading Ltd., Alameda Research Ltd. and other related entities whose centre of main interest, direction and management were purportedly located in The Bahamas.”

The commission said investigation into these events are ongoing.

It said the it will extend its full assistance to the police “if and when required”.

On Sunday, the Royal Bahamas Police Force announced that FTX is under investigation to determine “if any criminal misconduct occurred”.

Commissioner of Police Clayton Fernander said yesterday that police had not interviewed Bankman-Fried, who stepped down as FTX CEO on Friday.

Minister of National Security Wayne Munroe declined to indicate whether international authorities have reached out for The Bahamas’ assistance on foreign investigations in the matter.

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Jasper Ward

Jasper Ward started at The Nassau Guardian in September 2018. Ward covers a wide range of national and social issues. Education: Goldsmiths, University of London, MA in Race, Media and Social Justice

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