Bankrupt FTX Faces Criminal Investigation in the Bahamas

Together with the local securities regulator, the financial police in the Bahamas, where Sam Bankman-FTX Fried’s has its headquarters, are conducting an investigation to determine whether or not any illegal activity has taken place.

After the cryptocurrency trading platform FTX was run by Sam Bankman-Fried suddenly shut down and filed for bankruptcy a week ago, local authorities in the Bahamas have begun an investigation into the matter.

According to an official notification that was released on Sunday, a team from the Financial Crimes Investigation Branch of the jurisdiction is “working closely” with the Bahamas Securities Commission to examine whether or not any criminal activity happened.

On Thursday, the Securities Commission of the Bahamas issued an order to freeze assets related to the FTX exchange after it had already suspended the exchange’s registration the day before.

The collapse of the once multi-billion dollar cryptocurrency enterprise, which had its headquarters in the Bahamas, began in early November after an article published by CoinDesk called into question the financials of FTX’s sister company, Alameda Research. This led to a shortage of liquidity in the market. Before the sale fell through on Tuesday, competing exchange Binance was interested in purchasing troubled FTX. However, the transaction did not go through, and FTX is now seeking bankruptcy protection in the United States.

The Bahamas’ financial authorities have been keeping a tight eye on everything that’s been going on. When FTX admitted that it had allowed some Bahamian customers to withdraw funds from the exchange citing local regulatory requirements, the Securities Commission issued a statement saying that it had not directed the exchange to reinstate withdrawals. The statement was issued in response to the admission made by FTX.

The U.S. Securities and Exchange Commission and the Justice Department are both looking into FTX as part of their respective investigations.

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