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Bahamian Police Investigating FTX Collapse

NASSAU, BAHAMAS – The Royal Bahamas Police Force is now investigating the collapse of the fourth largest Crypto Exchange FTX which moved its headquarters here this year.

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2 years ago

November 13, 2022

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NASSAU, BAHAMAS – The Royal Bahamas Police Force is now investigating the collapse of the fourth largest Crypto Exchange FTX which moved its headquarters here this year.

The latest development comes following the company’s bankruptcy filing on Friday spurred by $6 billion in withdrawal requests in the space of 72 hours.

In light of the collapse of FTX and its subsequent provisional liquidation, the Royal Bahamas Police Force said in a statement Sunday, that a team of financial investigators from its Financial Crimes Branch are working closely with the securities commission to investigate if any criminal misconduct occurred.

The latest news comes after FTX representatives publicly stated that per Bahamian regulations, the company has begun to facilitate the withdrawals of Bahamian funds, saying those funds were among some of the withdrawals processed by FTX recently, as it complied with local regulators.

But the Bahamas Securities Commission seemingly on the defense saying it has not directed, authorized or suggested to FTX the prioritization of withdrawals of Bahamian clients.

The commission further noted that such transactions may be void under the country’s insolvency regime and consequently result in the clawing back of funds from Bahamian customers.

The commission further defended its position saying it does not condone preferential treatment of any investor or client of FTX or otherwise.

Capital Peak Strategies Founder And Principal, Alex Zerdin, tells us what he believes appears to have led to the company’s collapse.

“This has the appearance of a bank run in other instances and other forms of economic activity where there is a panic that customers, people who have money or have assets within FTX would not be able to withdraw it. And so they all rush for the withdrawal window at the same time, thereby creating a run on the exchange. There are live questions about the adequacy of the reserves at FTX, and I think that is a source of concern. There have been public reports of both – certainly civil and potentially criminal investigations of FTX and its founder.”

When asked his opinion on the company’s future Zerdin claimed, “This means the end of FTX in its current form and obviously under its current leadership, led by Sam Bankman-Fried, who has resigned. However, FTX may be able to reconstitute itself in some other shape or form on the far side of its bankruptcy proceedings. However, that is unlikely.

“So, we’ve seen the collapse of FTX, we’ve seen the collapse of three arrows capital hedge funds, we’ve seen the collapse of Terra and Luna and stable crypto asset and stablecoins. This is not going to be the last bankruptcy, the last insolvency in the crypto ecosystem. Unfortunately, other companies are likely going to be impacted by the collapse of FTX.”

And still no word on the status and fate of the company’s planned investment of around $60 million to develop a hotel, a commercial center, and a new headquarters at bayside executive park.