The Tribune

By JADE RUSSELL

jrussell@tribunemedia.net

THE collapse of FTX could be used as a crucial learning lesson moving forward, a governance reformer said yesterday.

“We’re still learning about what’s going on with FTX and still learning about the circumstances. But from what we do know there is an opportunity for us to ensure that going forward, there is greater transparency,” Organization for Responsible Governance Executive Director Matt Aubry said yesterday.

He was contacted by The Tribune for comment after the collapse of FTX resulted in local regulators taking quick action last week to protect clients of The Bahamas’ flagship crypto currency investor by “freezing” its assets, and seizing control of the company, amid reports it acquired $74m in local real estate this year alone.

The Securities Commission last week said the Supreme Court had approved Brian Simms, KC, as joint provisional liquidator with powers to take control of the crypto exchange’s Bahamian company and affiliate entities.

In an interview with The Tribune yesterday, Mr Aubry said the imploding circumstances surrounding FTX highlighted the importance of being mindful of companies that come into the country to conduct business.

“There is an opportunity to understand, you know, that groups that do come to The Bahamas — are they operating in the best practices and are they sufficiently solvent? Which was the issue here and we’ve seen that in other foreign direct investments that have come through The Bahamas,” he said.

When asked if he agreed with the Free National Movement’s call for the government to provide the investing public with a clear statement regarding FTX, Mr Aubry said the organisation is focused more on learning from these past incidents.

Mr Aubry explained: “When we look at something like FTX it becomes the kind of thing that The Bahamas depends upon periodically which is foreign direct investment that really starts to bring a lot of capital into the country.

“But it’s happened periodically that we’ve had these incidents that have come up. It’s important not only that we get information on specifically what was done. So, things like the Freedom of Information Act in its full enactment are crucial, ensuring that our legislation and our policy is reflective of a culture of transparency and more information is built out.”

The executive director of ORG stressed that officials should try to learn from situations such as FTX and more importantly similar instances have happened in past administrations.

“The most critical component, I think, is setting us up that we don’t keep making the same circumstances where things will happen. Industries fail, things don’t work out as planned. But the question and the scepticism that happens, we need to have is assurance.

“It’s not going to be in the specific unbundling of this circumstance that will change that culture. It’s in looking at the circumstances, one like others that have happened in past administrations and seeing what can change now,” Mr Aubry said.

Since news has circulated about the collapse of FTX and the provisional liquidation of FTX Digital Markets Ltd there has been concern raised on how this matter will affect the country. Free National Movement Leader Michael Pinder said in a press statement on Sunday that the opposition is dismayed at the turn of events regarding the collapse of FTX that held so much promise for the future of digital asset management in The Bahamas.

Mr Pintard also stressed the public needs to know what, if any exposure exists for the government in view of the developments, and if there are any implications for the national budget.