FTX, which had been among the world's largest cryptocurrency
exchanges, is headquartered in the Bahamas. The firm, whose liquidity crunch
forced the company to declare bankruptcy on November 11, is the subject of
investigations by Bahamian and US authorities. In mid-November, the Royal
Bahamas Police said that government investigators in the Bahamas were looking
at whether any "criminal misconduct occurred."
"We are in the early stages of an active and ongoing
investigation," Pinder said on Sunday, according to prepared remarks for
the speech. "It is a very complex investigation." He said it involved
both civil and criminal authorities.
Pinder said that the Bahamas Securities Commission,
Financial Intelligence Unit and the police's Financial Crimes Unit would
"continue to investigate the facts and circumstances regarding FTX's
insolvency crisis, and any potential violations of Bahamian law."
Pinder also defended the Bahamas' regulatory regime and said
that its Securities Commission had moved quickly "because of the strength
of the legislative framework."
Bahamas securities regulators had revoked FTX Digital's
licence and began involuntary liquidation proceedings the day before the US
bankruptcy case kicked off.
"Any attempt to lay the entirety of this debacle at the
feet of the Bahamas, because FTX is headquartered here, would be a gross
oversimplification of reality," Pinder said, adding that the Bahamas
Securities Commission had moved with "remarkable" speed in response.
Sam Bankman-Fried, 30, founded FTX in 2019 and rode
cryptocurrency boom to a net worth that Forbes pegged a year ago at $26.5
billion. Bankman-Fried resigned as FTX's chief executive officer the same day
as the firm's bankruptcy filing.
The liquidity crunch came after Bankman-Fried secretly moved
$10 billion (roughly Rs. 81,700 crore) of FTX customer funds to his proprietary
trading firm, Alameda Research, Reuters reported, citing two people familiar
with the matter.
The US Attorney's Office in Manhattan, led by veteran
securities fraud prosecutor Damian Williams, in mid-November began
investigating how FTX handled customer funds, a source with knowledge of the
probe told Reuters. The Securities and Exchange Commission and Commodity
Futures Trading Commission also opened probes.
FTX's demise comes after a string of meltdowns that have
taken down other key players including Voyager Digital and Celsius Network and
led some global investors to question the viability of the cryptocurrency
sector. © Reuters
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