Trouble in the Bahamas following FTX collapse: Report

Fol­low­ing the col­lapse of cryp­to exchange FTX, which was head­quar­tered in the island coun­try of Bahamas, Bahami­ans are report­ed­ly still try­ing to find a way to make sense of every­thing, while remain­ing opti­mistic about the future.

Accord­ing to a report by the Wall Street Jour­nal, the island coun­try — which had encour­aged cryp­tocur­ren­cy com­pa­nies to feel at home with their “copacetic reg­u­la­to­ry touch” — has been rocked by the implo­sion of FTX. 

The Bahamas was hard hit by Hur­ri­cane Dori­an in 2019 and the pan­dem­ic short­ly after­ward in 2020 and was already strug­gling to find ways to strength­en its econ­o­my, which relies heav­i­ly on tourism and off­shore bank­ing for a bulk of its gross domes­tic prod­uct. It appeared that the prime min­is­ter of the Bahamas, Philip Davis, and his gov­ern­ment believed cryp­to could play a crit­i­cal role in the island’s eco­nom­ic recovery. 

Now, the com­mu­ni­ty is sug­gest­ing that FTX’s sud­den implo­sion has left a trail of unem­ploy­ment on the tiny 80-square-mile island. When func­tion­ing at full capac­i­ty, FTX pro­vid­ed employ­ment for locals, report­ed­ly spend­ing over “$100,000 a week on cater­ing,” and also set up a pri­vate shut­tle ser­vice to trans­port work­ers around the island. FTX also hired a num­ber of local Bahami­ans in areas such as logis­tics, events plan­ning and reg­u­la­to­ry com­pli­ance, accord­ing to the WSJ. 

With the col­lapse of FTX, many high-spend­ing for­eign­ers who worked for the com­pa­ny and once boost­ed the local econ­o­my have report­ed­ly fled the island, leav­ing Bahami­an secu­ri­ty guards to now guard “near­ly vacant buildings.”

Relat­ed: SBF, FTX execs report­ed­ly spend mil­lions on prop­er­ties in the Bahamas

In the after­math of the fall of FTX, some cryp­to com­mu­ni­ty mem­bers have said they feel no sym­pa­thy for the effects of the col­lapse on the tiny island country.

Hack­er News user Matkoniecz com­ment­ed, “Giv­en that Bahamas help rich peo­ple and com­pa­nies to evade tax­es, my sym­pa­thy to neg­a­tive con­se­quences of that are limited.” 

Mean­while, Exendroinient00 shared, “Noth­ing wrong with invit­ing every scam­mer to do scam­ming on your islands,” like­ly in ref­er­ence to the island’s laws that seem to incen­tivize off­shore bank­ing activities.

On Oct. 18, Coin­tele­graph report­ed that the Bahamas‘ secu­ri­ties reg­u­la­tor ordered the trans­fer of FTX’s dig­i­tal assets to a wal­let owned by the com­mis­sion “for safekeeping.”

Accord­ing to a state­ment from the Roy­al Bahamas Police Force sent to Reuters on Nov 13, an inves­ti­ga­tion into pos­si­ble crim­i­nal mis­con­duct over the insol­ven­cy of FTX is under­way by finan­cial inves­ti­ga­tors and Bahami­an secu­ri­ties regulators.