FTX On Crosshair For “Any Potential Violations Of Bahamian Law”

Bahamian authorities are still investigating the collapsed cryptocurrency exchange FTX, according to Attorney General Ryan Pinder, even after the firm has signed its bankruptcy papers.

Pinder added 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.”

“We are in the early stages of an active and ongoing investigation,” said Pinder in a statement. “It is a very complex investigation.”

The exchange, which declared bankruptcy on November 11 due to a lack of liquidity, is being investigated by both Bahamian and US authorities. The Royal Bahamas Police indicated in mid-November that government officials in the Bahamas were looking into whether any “criminal misconduct occurred.”

The day before the US bankruptcy case commenced, Bahamas securities authorities suspended FTX Digital Markets (FDM), a Bahamas-based FTX company, license and initiated involuntary liquidation proceedings.

On November 15, FDM filed for chapter 15 bankruptcy in the United States, just days after the majority of the FTX group filed for chapter 11. Even stranger, the Bahamian unit filed for bankruptcy in the Southern District of New York, as opposed to Delaware, where the rest of the corporations did.

The Bahamas regulators then said it is not in its understanding that it is party to FTX’s Chapter 11 bankruptcy filing.

READ: FTX Unit Sees Its Digital Assets Seized By The Bahamas Government

“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,” the attorney general added.

During the bankruptcy proceedings, documents entered showed that FTX, founder Sam Bankman-Fried’s parents, and senior officials of the firm purchased at least 19 homes in the Bahamas valued at roughly $121 million over the last two years, according to official documents.

Court filings also disclosed that the exchange–through its sister hedge fund Alameda Research–acquired a stake in a small Washington bank called Farmington State Bank, now named Moonshine Bank.

READ: Moonstone Bank Is “Still Waiting” To See What Happens With FTX/Alameda $11.5 Million Seed Investment

It’s unclear how FTX–based in Bahamas–was permitted to acquire a stake in a US-licensed bank, which would require approval from federal regulators. Banking professionals say it’s difficult to believe authorities would have knowingly permitted FTX to take control of a US bank.

In his letter to staff after he signed the bankruptcy papers, Bankman-Fried claimed that there are “potential interest in billions of dollars of funding came in roughly eight minutes” minutes after inking the process final.

“Maybe there still is a chance to save the company. I believe that there are billions of dollars of genuine interest from new investors that could go to making customers whole. But I can’t promise you that anything will happen. Because it’s not my choice,” the FTX founder quipped in the letter.

Information for this briefing was found via Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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