Key Takeaways
- Court filings accused Bahamas officials of asking Bankman-Fired to mint new tokens and transfer them to officials
- The Securities Commission of the Bahamas (SCB) has also fired back against claims tokens under its control were stolen
- Hard to know what allegations are true, but anybody remotely connected to FTX is coming out badly amid the whole debacle – and that includes the Bahamas regulator
There were a lot of startling revelations to emerge over the last month or two following FTX’s spectacular collapse. But one of the most insidious, for me at least, was that the Bahamas government worked with Bankman-Fried to mint a new token in the wake of the exchange’s collapse.
Lawyers accuse Bahamas officials of attempting to mint new tokens
Lawyers for FTX said in a court filing in December that Bahamas government officials asked Bankman-Fried to mint new digital assets worth “hundreds of millions of dollars”, while requesting that the disgraced CEO transfer the new tokens over to the control of government officials.
The report, published by Bloomberg also outlines that Bahamas officials worked to try to help Bankman-Fried regain access to essential computer systems on the FTX platform. The officials were “responsible for directing unauthorised access” to the systems in order to take control of some of the digital assets that were on the FTX platform.
This was all particularly concerning as money was evidently moving on the blockchain after FTX’s collapse. A reported “hack” led to $477 million of crypto moving in the days after the bankruptcy filing, with the hacker then looking to bridge the funds into various entities and currencies.
(1/2) Exchanges should be aware that certain funds transferred from FTX Global and related debtors without authorization on 11/11/22 are being transferred to them through intermediate wallets.
— FTX (@FTX_Official) November 20, 2022
Whether this has any connection to the story regarding the Bahamas’ pressure on Bankman-Fried is pure speculation, and to be clear, no evidence at all suggests that authorities have anything to do with it.
The Bahaman regulator today released a statement fighting back against the aforementioned comments by John Ray III, the representative of US-based FTX debtors. The statement read that it “must once again correct material misstatements made by Mr. John J. Ray III…in both the press and court filings”.
The statement outlined that Ray’s court filings, which were “under oath”, were “without evidence”, staunchly firing back against the claim that officials had ordered Bankman-Fried to mint new tokens, as well as instructing “employees (of FTX) to mint $300 million in new FTT tokens”. It went on to dispute the claim that digital assets under the control of the Securities Commission of the Bahamas (SCB) were “stolen”.
What actually happened?
In truth, it is impossible to know the ins and outs of the debacle here. But what is obvious is that this entire saga continues to get more sordid and embarrassing for cryptocurrency as a whole each day, and anybody remotely connected to FTX is looking worse and worse as time goes on.
The was obviously a massive failure with regard to regulation in the Bahamas, and the SCB is getting rightfully hammered as a result. Whether any of the other allegations hold water, we do not have evidence to opine on, but I’m sure time will tell.
With over one million creditors, $8 billion in missing client assets, and many lives ruined, the sadness and gravity of the FTX situation is tough to overstate. Now, it’s time to sort through the mess and try to find out who exactly was at fault beyond Bankman-Fried, because there is more than enough blame to go around.