NASSAU, BAHAMAS — Executives of the country’s first crowdfunding platform ArawakX are calling for the introduction of ‘whistleblower’ legislation in The Bahamas they believe could help prevent “blowups” like FTX from happening again.
FTX, one of the world’s largest crypto exchanges collapsed after rival crypto exchange giant Binance backed out of a deal to save the company.
The company filed for Chapter 11 bankruptcy protection on November 11.
FTX’s former CEO and founder Sam Bankman-Fried who was arrested at his Albany apartment on the eve of a congressional hearing into FTX’s collapse has been remanded to The Bahamas Department of Corrections and denied bail. The US is seeking his extradition, with the Securities Exchange Commission (SEC) a scheme to defraud investors of billions of dollars which he diverted to his Alameda Research crypto hedge fund for his own personal benefit and to help grow his crypto empire.
Apart from whistleblower legislation, ArawakX is also calling for the strengthening of the regulatory powers of the Central Bank and the Securities Commission of The Bahamas.
ArawakX’s chief technology officer D’Arcy Rahming Jr said: “There was an Integrity Commission Bill in 2017, that was primarily for persons in the Government, there is a section in there on Whistleblowers that could apply to regulated financial services entities. The reality is our jurisdiction has taken a reputational hit globally, but we are a nation of laws and enforcement. I think the regulators and law enforcement are doing the best they can given the enormity of the situation.”
Rahming continued: “I believe a proper system that protects whistleblowers will strengthen existing laws that are already in place. This law would give whistleblowers the comfort to come forward, and not worry about being victimized by industry and powerful people. When an instance of abuse occurs, that no one wants to talk about, it can get swept under the rug. When it blows up, it affects all of us. There are good hardworking people in this industry that are trying to add value to their customers’ lives. For me, I think it’s ridiculous that projects that are creating jobs and growing the economy can be affected by a powerful person or group’s actions.”
According to Rahming, many of the senior staff at ArawakX have been whistleblowers in the past, and the system did not protect them.
“There are gaps in our laws and we as a jurisdiction need to make meaningful steps to improve our framework. No one can stop bad actors, but we as a jurisdiction are obligated to fill in the gaps that these people sit in. The laws work once they are implemented. But without the power of law, regulators are powerless to prevent abuses” Rahming added.
Executives of the crowdfunding platform are recommending that the government pass a Whistleblowers Act – where whistleblowers receive a percentage of the fines, are protected, and don’t fear coming forward; an increase in the autonomy of the regulators, that allows
them the space to investigate, discipline, and prosecute regardless of how wealthy or powerful the person is being investigated and the creation of a financial services ombudsman so that average people have a complaint mechanism.
