FTX Under Criminal Investigation in the Bahamas Following Bankruptcy Declaration

The US DOJ and the SEC are also investigating the collapse of the crypto exchange.

FTX Under Criminal Investigation in the Bahamas Following Bankruptcy Declaration

Photo Credit: Unsplash/ Mariia Shalabaieva

FTX filed for bankruptcy on Friday and announced the resignation of Sam Bankman-Fried

Highlights
  • The Royal Bahamas Police Force confirmed the investigation into FTX
  • FTX moved its headquarters last September
  • The Bahamas has openly welcomed crypto businesses since 2020

FTX, which filed for Chapter 11 bankruptcy protection in the US on Friday, is now under investigation in its headquarters in the Bahamas. In a statement, the Royal Bahamas Police Force confirmed the investigation into FTX. That said, it's not clear which particular aspect of the swift collapse of FTX authorities are investigating. FTX moved its headquarters to The Bahamas last year, with Sam Bankman-Fried hailing it at the time as "one of the few places to set up a comprehensive framework for crypto."

"In light of the collapse of FTX globally and the provisional liquidations of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred," the Royal Bahamas Police Force said in a release posted to Twitter Sunday.

The statement shared on the Securities Commission of The Bahamas' Twitter page stated, "The Commission wishes to advise that it has not directed, authorised or suggested to FTX Digital Markets, Ltd. the prioritization of withdrawals for Bahamian clients."

FTX Digital Markets is a subsidiary of FTX Trading and is licensed and regulated in the Bahamas.

FTX, one of the world's largest crypto exchanges, is also facing an investigation by the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) into its mismanagement of customer funds and relationships with FTX.US and Alameda Research.

This weekend, there has been increased speculation on the whereabouts of now-former CEO Sam Bankman-Fried, who told Reuters on Saturday he was in the Bahamas. A subsequent report via CoinTelegraph said he and two former FTX associates were “under supervision” by Bahamian authorities.

The Bahamas has welcomed crypto businesses, and in 2020 became one of the first countries to release its own central bank digital currency (CBDC), a digital, government-controlled version of its native dollar.


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