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FTX,
which had been among the world's largest cryptocurrency
exchanges, is headquartered in the Bahamas. The firm, whose
liquidity crunch forced the company to declare bankruptcy on
Nov. 11, is the subject of investigations by Bahamian and U.S.
authorities. In mid-November, the Royal Bahamas Police said that
government investigators in the Bahamas were looking at whether
any "criminal misconduct occurred."
"We are in the early stages of an active and ongoing
investigation," Pinder said on Sunday, according to prepared
remarks for the speech. "It is a very complex investigation." He
said it involved both civil and criminal authorities.
Pinder said 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."
Pinder also defended the Bahamas' regulatory regime and said
that its Securities Commission had moved quickly "because of the
strength of the legislative framework."
Bahamas securities regulators had revoked FTX Digital's license
and began involuntary liquidation proceedings the day before the
U.S. bankruptcy case kicked off.
"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," Pinder said, adding that the
Bahamas Securities Commission had moved with "remarkable" speed
in response.
Sam Bankman-Fried, 30, founded FTX in 2019 and rode
cryptocurrency boom to a net worth that Forbes pegged a year ago
at $26.5 billion. Bankman-Fried resigned as FTX's chief
executive officer the same day as the firm's bankruptcy filing.
The liquidity crunch came after Bankman-Fried secretly moved $10
billion of FTX customer funds to his proprietary trading firm,
Alameda Research, Reuters reported, citing two people familiar
with the matter.
The U.S. Attorney's Office in Manhattan, led by veteran
securities fraud prosecutor Damian Williams, in mid-November
began investigating how FTX handled customer funds, a source
with knowledge of the probe told Reuters. The Securities and
Exchange Commission and Commodity Futures Trading Commission
also opened probes.
FTX's demise comes after a string of meltdowns that have taken
down other key players including Voyager Digital and Celsius
Network and led some global investors to question the viability
of the cryptocurrency sector.
(Reporting by Jasper Ward, Mrinmay Dey, David Randall, Jaiveer
Shekhawat; Editing by Megan Davies and Daniel Wallis)
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