Bahamas attorney general Ryan Pinder has called any attempt to lay the entirety of the blame for FTX debacle on this nation a "gross oversimplification of reality."
Pinder, during a national address on behalf of the government on the FTX developments he said: "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."
He highlighted that Alameda Research, a crypto trading firm owned by FTX's founder Sam Bankman-Fried, was not regulated in The Bahamas and that to the extent Alameda Research is found to have committed any improprieties in The Bahamas, it will be subject to this jurisdiction.
Pinder also said on 8 November it was reported that Binance had entered a non- binding agreement to buy FTX, however, the very next day, Binance pulled out of the deal.
"One day later, November 10, 2022, the Securities Commission of The Bahamas, announced that it had taken action to freeze the assets of FTX Digital Markets, had suspended the registration of FTX Digital Markets as a licensee under The Digital Assets and Registered Exchanges Act, also known as the "DARE Act", and applied to the Supreme Court of The Bahamas, pursuant to its regulatory authority under the DARE Act, to place the company into provisional liquidation."
He said that the speed at which the SCB was able to move was "remarkable" by any standard, adding that "the Securities Commission deserves the highest praise for moving so swiftly and decisively to suspend FTX Digital Markets' license and appoint the provisional liquidators" and that "no other jurisdiction in the world moved or would have moved as quickly in circumstances such as these".
He further said: "We have been shocked at the ignorance of those who assert that FTX came to The Bahamas because they did not want to submit to regulatory scrutiny; in fact, the world is full of countries in which there is no legislative or regulatory authority over crypto, but The Bahamas is not one of them.
"We have been able to assert our leadership in this new field because in the digital assets arena, what matters is not the size of your land mass, or the size of your GDP, but the ingenuity and rigour of your people and jurisdiction. When a respected risk and market integrity firm ranked the world's digital assets regulatory regimes earlier this year, our country was first, and for good reason."
But the Bahamas Eyewitness news reported that opposition shadow minister for Finance Kwasi Thompson said the country's reputation was under attack and questioned whether the government had hired an international PR firm to manage the country's international response to the collapse of crypto exchange giant FTX.
In a statement, Thompson welcomed Pinder's statement but called the exercise a missed opportunity for Prime Minister Philip Davis to address the country.
He said many in the international community are using the fall of FTX to attack the good reputation of the Bahamas as a well-regulated Financial Services jurisdiction.
He said while the former administration positioned the country to become a world leader in Fintech Financial Services through the passage of the Digital Assets Registration Exchange Act (DARE), the approval to operate as a Digital Exchange and the fall of FTX occurred under the Davis administration's watch.
"We are saddened that the PLP Government has squandered opportunity after opportunity," Thompson said.
"We are dismayed that it took this long for a comprehensive statement to be made. Even the S&P in their most recent report on the Bahamas stated "the Bahamas has a sizeable financial sector…The local economy benefited from the activities of a digital exchange over the past year, but this sector may face setbacks as FTX a digital asset exchange headquartered in the Bahamas recently filed for bankruptcy."
