The Tribune

By MALCOLM

STRACHAN

THE collapse of FTX – with the vast amounts of money involved – was always going to attract a global spotlight.

Perhaps just as inevitable is the hardball being played by different jurisdictions and vested interests considering that billions are at stake.

A lot of commentary however has been completely unwarranted – particularly when it comes to casting doubt on The Bahamas in terms of its ethics or its ability to handle such a collapse.

Last month, an article in the Washington Post stirred plenty of disgruntlement, and rightly so.

It was a supposed analysis but it was so out of date that literally it veered off into the 17th century.

The article claimed that the biggest red flag over FTX was the fact that it relocated to The Bahamas, before venturing back into the history of The Bahamas’ piracy days. Of course, navigating a pirate ship is centuries removed and light years away from modern day crypto currency fund transfers, but it didn’t stop the author from casting aspersions on The Bahamas over two things that are not remotely connected.

It didn’t stop there, with the author plunging on through Prohibition bootlegging, the Bay Street Boys, Meyer Lansky and more – again, not one of which has anything to do with the current situation. All nonsense.

But, that one article aside, such nonsense seemed to be buzzing around in various allegations loosely pointed towards the Securities Commission, The Bahamas and the Joint Provisional Liquidators, without much substance to back them up.

The biggest of those centred around the Securities Commission securing assets of FTX – but again the evidence backed the commission. An allegation of supposed collusion with Sam Bankman-Fried was undermined by the very documents put forward by FTX. An email referred to by FTX US chief John Ray is actually the document that prompted the Securities Commission to seek Bankman-Fried’s removal.

The email, which was also copied to Christina Rolle, the Securities Commission’s executive director, and Allyson Maynard-Gibson KC, the former attorney general who acted as FTX’s Bahamian attorney, said FTX had separated all Bahamian client assets from those of other customers and would give them preferential treatment by returning their funds.

“We are deeply grateful for what The Bahamas has done for us, and deeply committed to it. We are also deeply sorry about this mess,” Mr Bankman-Fried told Mr Pinder. “As part of this we have segregated funds for all Bahamian customers on FTX.

“And we would be more than happy to open up withdrawals for all Bahamian customers on FTX, so that they can, tomorrow, fully withdraw all of their assets, making them fully whole. It’s your call whether you want us to do this, but we are more than happy to and would consider it the very least of our duty to the country, and could open it up immediately if you reply saying you want us to. If we don’t hear back from you, we are going to go ahead and do it tomorrow.”

But as one of the liquidators, Brian Simms, said: “That very email referenced in the objection was the same email that the commission used as evidence to obtain authorisation to commence the Bahamian provisional liquidation in The Bahamas.”

If you look beyond the public mudslinging and what people are actually doing in this case, everyone has been doing what they’re supposed to – their jobs.

Former Prime Minister Dr Hubert Minnis spoke up last week to say that statements from the US about not trusting The Bahamas in the wake of the FTX matter were “very serious” – and he was right. Trust is important in international trading.

So, it might not attract the big international headlines, but it was a very significant step when on Friday it was announced that FTX had agreed on terms for “mutual cooperation” on the Chapter 11 proceedings in the US and the provisional liquidation in The Bahamas.

Under that agreement, it will mean parties share information and work to secure and return property – as well as agreeing on what will happen with real estate in The Bahamas, a very solid asset that will prove significant in trying to pay back those who lost their money when FTX collapsed.

But beyond the detail, it is the show of faith in the parties involved that matters most.

The statement pointedly said: “The parties are each comfortable the digital assets have been appropriately safeguarded by the Securities Commission as restructuring discussions continue.”

That’s a big pat on the back for the commission considering the sharp-edged words that have been exchanged previously – which often seemed ill-researched on the part of those casting doubt on the Bahamian process.

The liquidators too, who have been stymied by the inability to access FTX’s cloud-based information systems, are singled out for praise. John Ray said: “We would like to thank all of the Joint Provisional Liquidators of FTX DM for constructive meetings this week in Miami and all their work on behalf of their estate.”

Peace, it seems, has broken out.

Mr Ray spoke of “some issues where we do not yet have a meeting of the minds: but this is very much a big step forward.

It dispels the questions of trust that were floating in the air and fuelling articles such as that one that harked back to the days of piracy, irrelevant as that might be to the realities of today.

A lot of this is couched in the language of business and the formality of legal wording, but the truth endorses the work the commission and the liquidators have been doing.

They would be fully entitled to give themselves a pat on the back for a job well done – so far. There’s a long way to go, but it looks like the world is recognising that we have the right people in place for the journey.