By Bert Wilkinson From Caribbean Life

Less than two weeks after one of the world’s largest cryptocurrency firms collapsed in the midst of a horrid mismanagement scandal, The Bahamian government is now under severe pressure to defend its record regarding its monitoring of the company.

Crypto firm FTX which had last year set up headquarters in The Bahamas, has left thousands of investors around the world like NFL legend Tom Brady in a financial lurch as, among other issues, it went under in the wake of poor management, lax internal oversight systems and financial inbreeding. Investigators say that managers had illegally moved monies from one affiliate to the next to fund a range of issues including prime real estate purchases in The Bahamas worth more than $100 million. These include, according to Reuters News, at least seven condos in trendy areas in northern Bahamas. Some of the properties were to be used as offices for staff.

Responding to criticisms in the U.S. this week, Bahamian Foreign Minister Fred Mitchell argued that Americans have no right or business attacking The Bahamas for alleged poor oversight of FTX as a string of larger companies had gone under even more scandalously on America’s mainland including Enron, those run by disgraced ponzi scheme player Bernie Madoff and the Charles Keating housing scandal in recent decades. This happened right under the nose of U.S. regulators, he said.

“The securities commission acted with dispatch to freeze the assets, put a liquidator in and secure the assets. Somehow the US media and other kooks are suggesting it was giving permission to the owners to spirit money away for themselves after the order was made. Not so. The assets are in a secured wallet,” the Guardian newspaper quoted Mitchell as saying.

The governing Progressive Labor Party (PLP) has also been under pressure to indicate whether FTX had helped to finance its election campaign that helped it to win government just over a year ago.

Prime Minister Phillip Davis told reporters this week that he was unaware whether FTX money had been part of party financing during the campaign but he did join Minister Mitchell in complaining that the nation had been unfairly hammered in the US for alleged lax oversight.

“I have positioned The Bahamas to be the leading jurisdiction in the digital assets space. I’m intending to keep that position and the only thing of concern is reputational consequences and I’m dealing with that. I think it’s unfair, an unfair characterization. I’m not concerned about our reputation in that regard because most of what is being said in that regard is the posturing of persons who would wish to have the liquidation under their control. When that is settled we will see everything just blow away.”

Meanwhile, The Bahamian supreme court on Monday permitted the securities commission the right of indemnity and the right of reimbursement to expenses linked to any regulatory action taken to protect the assets of FTX Digital Markets.

The order basically mandates that FTX bears any reasonable costs the commission incurs for works in the wake of the collapse.

For more on this story go to: Caribbean Life