Regulator Denies Requiring FTX To Allow Bahamas-Based Withdrawals; Bahamas Police Launches Investigation

The Securities Commission of the Bahamas (SCB) has clarified that FTX, the Bahamas-based crypto exchange, was not required to allow users in the country to withdraw their funds.

The SCB’s statement, which was published on Twitter on Saturday, follows FTX’s Friday announcement that said that per “Bahamian HQ’s regulation and regulators,” the company has begun to facilitate local withdrawals.

The SCB says that it had not “directed, authorized or suggested to FTX Digital Markets” to prioritize withdrawals for users in the Bahamas, adding that “such transactions may be characterized as voidable preferences under the insolvency regime and consequently result in clawing back funds from Bahamian customers.”

The regulator froze FTX’s assets in the Bahamas on Thursday, saying in a statement that the move was to “preserve assets and stabilize the company,” but users were still able to withdraw close to $7 million from the exchange within a few hours on Thursday morning. 

Financial investigators from the Royal Bahamas Police Force in Nassau are currently working with the SCB to investigate FTX for possible “criminal misconduct.”

This development follows a befuddling series of events that crescendoed in the FTX Group filing for voluntary Chapter 11, with its founder Sam Bankman-Fried resigning to turn over the trainwreck to John J. Ray III on Saturday morning.

But before the filing, the exchange was reportedly hacked, losing about $600 million. FTX later said that it was able to move some of its remaining funds into cold storage to “mitigate damage.”

More details are expected to surface as the company goes through the bankruptcy process but to catch up on what’s happened so far, here’s a video from SmallCapSteve:

Information for this briefing was found via Twitter, Forbes, Reuters, Coindesk, 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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