A press release was published by the Securities Commission of the Bahamas (SCB) on November 14th, 2022 that explained that they had chosen the provisional liquidator for dealing with the FTX situation.
According to the SCB, they have opted to hire one of the ‘Big Four’ accounting firms, which is PwC (Pricewaterhousecoopers), and it added that they had to move quickly due to the magnitude of the problem relating to FTX.
On Monday, the SCB’s press release dictated that they had appointed Peter Greaves and Kevin Cambridge from PwC and the court had also approved them as joint provisional liquidators.
As compared to conventional liquidators, provisional ones are not responsible for funds distribution and their job is to safeguard the assets of the bankrupt firm.
The Bahamas regulator also added that they were collaborating with other supervisory authorities for dealing with the FTX fallout.
The SCB said on Monday that since the collapse of FTX was multijurisdictional, they would engage with other authorities in the coming days and weeks to deal with it on a regulator-to-regulator basis.
Moreover, the securities regulator also added that they needed to speed up the case because of the magnitude of the implications associated with the collapse of the crypto empire.
The securities regulator of the Bahamas said that considering the international implications, the urgency, and the extent of the damage associated with FTX, they have had to take swift action.
It said that it had used its regulatory powers for protecting the interest of creditors, clients as well as other global stakeholders of FTX Digital Markets Ltd, which are granted under the DARE Act that relates to digital assets and the exchanges registered in the country.
The Bahamas regulator had also frozen the assets of FTX earlier and had submitted a request to the Supreme Court for appointing a provisional liquidator.
The Bahamas regulator had also said on November 12th that they had not given approval for prioritizing the withdrawals of clients of FTX in the Bahamas.
On November 13th, there was an announcement from the Royal Police Force in the Bahamas that it had launched an investigation into the activities of FTX.
A spokesperson for the Bahamian police said that the Financial Crimes Investigation Branch had set up a team of financial investigators.
They were working with the Securities Commission of the Bahamas (SCB) to determine if there had been any criminal misconduct where FTX is concerned.
It should be noted that while FTX had halted withdrawals for its clients, it did resume withdrawals for its users in the Bahamas.
The exchange cited regulatory requirements as the reason for giving this option to its Bahamian users, which had obviously drawn the ire of others.
The fact that FTX had been operating from an offshore zone like the Bahamas has also given rise to concerns about lack of regulation.
Lawmakers in the United States have also lashed out at the SEC for now providing a regulatory framework for the crypto space, pushing people into using such offshore companies.