(Decrypt) It appears the honeymoon is over between SBF and the Bahamas. The Securities Commission of the West Indies nation issued an order on Thursday to freeze the assets of the embattled cryptocurrency exchange FTX.
«Today the Securities Commission of The Bahamas took action to freeze assets of FTX Digital Markets and related parties,» the agency wrote, adding that the commission also suspended FTX’s operation registration and asked the Supreme Court of the Bahamas for a provisional liquidator to be appointed.
The letter, posted by the Nassau Guardian on Twitter, follows a week of trouble for one-time crypto golden boy Sam Bankman-Fried and FTX, once one of the largest cryptocurrency exchanges in the world.
The agency said it is aware of statements suggesting that FTX’s assets were mishandled, mismanaged, or transferred to Alameda Research. The commission called these actions potentially unlawful and said the «prudent course of action» was to put FTX Digital Markets into provisional liquidation to «preserve assets and stabilize the company.»
«The Commission is committed to working with the provisional liquidator to endeavor to obtain the best possible outcome for the customers and other stakeholders of FTX,» the agency added.
FTX’s troubles began on November 6, 2022, when Binance CEO Changpeng «CZ» Zhao said that the world’s largest cryptocurrency exchange was liquidating its holdings of FTT, the native token of rival exchange FTX.
Binance held a considerable number of FTT tokens, around 23 million, worth around $529 million, according to Investopedia. When Binance announced liquidating its entire position, causing a run on FTX, FTT’s value sank 85.6% and is currently trading at $3.43, down from $24.01 the week before.
In September 2021, FTX opened its new headquarters in the Bahamas after moving the operation out of Hong Kong, calling the Bahamas one of the few places to set up a comprehensive framework for crypto.
The Bahamas has embraced digital currency, including launching a central bank digital currency, the sand dollar. Coupled with friendly crypto regulations, companies like OKX and FTX opened offices in the island nation.
In May of this year, Sam Bankman-Fried, still in the honeymoon phase of FTX’s move to the Bahamas, held a four-day conference in the Bahamas. The event attracted not only Wall Street but also Tom Brady, Gisele Bundchen, Bill Clinton, Tony Blair, Andrew Yang, Katy Perry, Orlando Bloom, Apolo Ohno, Rick Fox, Udonis Haslem, and Liam Payne from One Direction.