Posted on 11/13/2022 3:43:51 PM PST by csvset
As FTX Digital Markets (FDM) chief Sam Bankman-Fried rang out a mea culpa chorus peppered with expletives to his followers, clients and investors through Twitter yesterday, the Securities Commission of The Bahamas (SCB) froze his company’s assets and appointed a provisional liquidator for the embattled FTX now making international headlines.
The SCB released a statement late yesterday explaining that it became aware of public statements suggesting that the Bahamas-headquartered FTX mishandled client assets and “mismanaged and/or transferred (assets) to Alameda Research”, which is FTX’s supposed “sister” company in the United States.
It said any of those actions would have been in contravention of “normal governance” without the consent of the company’s clients and a “potentially unlawful” move.
According to the SCB statement, Brian Simms, KC, of Lennox Paton, was appointed as provisional liquidator for FTX Digital Markets Ltd.
“Today, the Securities Commission of The Bahamas (the Commission) took action to freeze assets of FTX Digital Markets and related parties,” the statement said.
“The Commission also suspended the registration and applied to the Supreme Court of The Bahamas for the appointment of a provisional liquidator of FTX Digital Markets Ltd. (FDM).”
The statement added: “Additionally, the powers of the directors of FDM have been suspended and no assets of FDM, client assets or trust assets held by FDM, can be transferred, assigned or otherwise dealt with, without the written approval of the provisional liquidator.”
FTX’s Vice President of Communications and Corporate Social Responsibility Valdez Russell told Guardian Business yesterday that the SCB was swift in demonstrating its importance as a regulator in the digital assets space, and in “maintaining the integrity and jurisdictional reputation of The Bahamas”.
“As FTX strives to do right for customers, investors and employees, the involvement of a provisional liquidator will prove helpful in a process that facilitates the requisite due diligence that will contribute to a better future for digital assets in a global landscape,” Russell said.
The world has been waiting to understand how a sector once described — and in some cases still described — as the wild west would look in a regulated jurisdiction.
The Digital Assets and Registered Exchanges (DARE) Act was built just for a week like the one FTX is having.
With FTX in a liquidity crisis and seeking funding to pay clients who have decided to cash out of the exchange to the tune of billions of dollars, the company’s regulator, the SCB, now has to ensure through a liquidator that that process happens in a controlled and legal manner.
The SCB statement explained that the securities commission has been “proactively” dealing with the FTX debacle since news began to break on the company’s liquidity issues Tuesday.
“The Commission determined that the prudent course of action was to put FDM into provisional liquidation to preserve assets and stabilize the company,” the SCB statement said.
“The Commission is committed to working with the provisional liquidator to endeavor to obtain the best possible outcome for the customers and other stakeholders of FTX.”
The US Securities and Exchange Commission is now looking into the inner workings of FTX, after it was announced on Tuesday that Bankman-Fried called Binance owner Changpeng Zhao, also known as CZ, for a bailout after there was a run on FTX’s token FTT that left FTX in a liquidity crisis.
Binance, the world’s largest cryptocurrency exchange, revealed Wednesday via Twitter that it will not make good on its conditional intent to bail out FTX.
Many Bahamians uprooted their lives to help build out FTX’s cryptocurrency exchange in The Bahamas.
The company promised to introduce many Bahamians to the world of cryptocurrency and educate the next generation in the nascent fintech mechanism.
Many companies have come to rely on FTX for their operations.
It is understood that the company sometimes ordered as much as $10,000 worth of food per week from local vendors.
FTX has also amassed property holdings in the tens of millions, also breaking ground in April on a $60 million headquarters complex in western New Providence that was to be the envy of any internet-based company.
Now, those dreams are in limbo along with the company’s assets until the provisional liquidator completes his report on and decides the way forward for FTX.
Apology
Bankman Fried took to Twitter yesterday to apologize for his mishandling of his multi-billion-dollar cryptocurrency exchange and related digital asset businesses.
“I’m sorry. That’s the biggest thing,” said Bankman-Fried.
“I f_____ up, and should have done better.
“And so we are where we are. Which sucks, and that’s on me. I’m sorry.
“Anyway: right now, my #1 priority – by far – is doing right by users.
“And I’m going to do everything I can to do that. To take responsibility and do what I can.”
Widespread news reports have explained that Bankman-Fried is scurrying to find $8 billion to plug the liquidity hole in his company and make things right with his investors and clients.
He contended in his Twitter confessional that he will do everything he can to raise the money.
“So, right now, we’re spending the week doing everything we can to raise liquidity,” he said.
“I can’t make any promises about that. But I’m going to try. And give anything I have to, if that will make it work.”
In April, Prime Minister Philip Davis officially opened the offices of FTX, explaining in his address during a ribbon-cutting ceremony that it is his hope that the domiciling of FTX in The Bahamas will be a catalyst for more fintech firms to open offices.
Davis said that “companies like FTX want to be in a well-regulated, stable environment like ours where continued growth and expansion are supported”.
Bankman-Fried has said his company chose The Bahamas from a laundry list of countries because of its digital assets legislation, the DARE Act.
During the groundbreaking for FTX’s headquarters, Bankman-Fried said FTX searched the globe with a fine-tooth comb to find a well-regulated jurisdiction to set up shop.
“We sort of went country by country and crossed off the ones that required a license but could not grant one,” he said.
“We weren’t sure where we’d end up … we sort of got word that one of them (countries) actually had already passed a cryptocurrency regulation regime, one of the only jurisdictions in the world to do so, and the few emissaries we had sent out to check it out had a really, really good experience. That was The Bahamas.
“Halfway through the process of trying to figure out where we would be, The Bahamas sort of jumped all the way to the front.”
Bankman-Fried said the work that had been done by the SCB and the government went a long way in helping FTX make the decision to move its company to this country.
FTX also held one of the world’s largest cryptocurrency and blockchain conferences called Crypto Bahamas at Baha Mar this year in partnership with thought leadership group SALT.
Baha Mar recently hailed FTX as being good for the country and good for Baha Mar.
The future of Crypto Bahamas, which brought speakers like former British Prime Minister Tony Blair and former US President Bill Clinton, now hangs in the balance.
Crypto Bahamas 2023 has already been announced and organizers planned to fill Baha Mar to capacity with attendees.
What’s there to liquidate? They hacked (stole) all the remaining funds.
Going through motions then ? A show ? Just thought I’d post the local (Bahamas) take on it.
She is CEO of the hedgefund that gambled away the investors fund. Her hands are just as dirty.
No the purloined billions ain’t helping.
A very meme able face. She has the Rat face ready made !
Bucky Beaver meets Jon Benet Ramsey
Bucky Beaver? You remember Ipana toothpaste?
That was a few years back and I had baby teeth.
The turd behind this spent $100,000,000.00 to elect progressive Democrats.
I want EVERY penny accounted for.
She looks like she is morphing in to a Barn Owl.
Just give whatever’s left to the UAW.
The amount of energy these crypto mining operations use is staggering.
BS. He is a protected Democrat donor. Slap on the wrist.
FTX only did what Planned Parenthood and many other subsidized organizations have and are doing and have been doing for decades. It’s how all those inside the D. C. bubble have made it one of the wealthiest areas in the nation.
She kind of has that Hilary Rodham look about her.
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