Americans chastised for attacking The Bahamas for alleged poor oversight

Facing pressures over the collapse of FTX, one of the world’s largest cryptocurrency firm, The Bahamian government is pushing back against mounting criticisms about its cryptocurrency oversight record.

The Bahamian government is in the midst of a horrid mismanagement scandal, regarding its monitoring of FTX, which collapsed two weeks ago having set up headquarters the Caribbean territory last year.

The collapse 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 US$100 million. These include, according to Reuters, at least seven condos in trendy areas in northern Bahamas.

Some of the properties were to be used as offices for staff.

Deflecting Americans criticisms.

Responding to criticisms in the US this week, Bahamian Foreign Minister Fred Mitchell sought to deflect some of the criticisms.

Mitchell contended 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.

Continuing, Mitchell argued that this happened right under the nose of US regulators.

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

Said Davis: “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 characterisation. 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.