NASSAU, BAHAMAS — Prime Minister Philip today said he believes The Bahamas will emerge from the ashes of the FTX collapse with an enhanced reputation and a strengthened regulatory framework.
Davis said officials have not identified any defiencies in the country’s regulatory framework that could have avoided the crypto giant’s implosion, adding that it was the country’s robust regime that allowed regulators to act quickly to protect the interests of clients and stakeholders.
He warned critics to “tread carefully” when discussing the complex saga that is still unfolding.
During his communication to Parliament, Davis said the matter had captured the attention of the entire world and those that sought to use it for “cheap political points” were not patriots of the country.
“I have every confidence that The Bahamas will emerge from the proceedings involving FTX – proceedings taking place here as well as in other jurisdictions — with an enhanced reputation as a solid digital assets jurisdiction,” he said.
He continued: “The Bahamas was already on track to update the regulatory framework, before year’s end, to address lessons learned as a result of this year’s crypto winter. No doubt, as the various jurisdictions involved unravel the actions that led to this moment, we will be among the first jurisdictions to gain and put to use valuable insights, allowing us to further strengthen our framework.
Chairwoman of the U.S. House Financial Services Committee Congresswoman Maxine Waters and Ranking Member Congresswoman Patrick McHenry today announced a December hearing to investigate the collapse of FTX.
In parliament, Davis said FTX has only one entity regulated in The Bahamas, FTX Digital Markets Ltd, which has been suspended. He acknowledged FTX and its related companies are now subject to insolvency proceedings and under investigation for potential criminal conduct.
He stressed The Bahamas did not have sole oversight of FTX’s global operations but the key priority for the country was the full protection of rights and assets for Bahamian citizens and to mitigate any impact.
Davis furthered that numerous crypto tokens and companies around the world have collapsed within the last few months, listing several failed tokens that he said set off a series of financial shocks.
He said tech companies like Meta (Facebook) and Amazon were also challenged, having laid off thousands and also shed significant market capital over the last couple of months.
“There have been both booms and busts in the world of crypto, and this year has been a significant bust – with total market capitalization falling from $3 trillion to $800 million or lower; the steep sell-offs and declining volumes have led analysts to describe this time as a “crypto winter”,” he said.
Despite this, he said believed that blockchain technology and smart contracts will continue to play a role in the world’s growing financial architecture.
Davis delivered communications on the collapse of FTX and the government’s fiscal performance for the First Quarter of the Fiscal Year 2022.
On the latter, he noted the country recorded the lowest first quarter deficit within a decade.
“A new day has dawned,” he said.
