MITCHELL SAYS STOP BLAMING THE BAHAMAS
The following story appeared in the Nassau Guardian on 16 December 2022:
Mitchell again suggests FTX firestorm overblown
Fred Mitchell.
Minister of Foreign Affairs Fred Mitchell opined once again yesterday that the collapse of FTX and the ensuing scrutiny over The Bahamas, where FTX was based, does not pose any significant harm to the jurisdiction and much of the commentary over the matter has been overblown.
The Bahamas, like the United States and elsewhere, has had major business failures before and will emerge just fine from the current fallout, said Mitchell in response to questions from reporters.
“There is, in fact, a lot of overblown rhetoric about this matter…It’s a business failure,” he said.
“Business failures happen all the time. The jurisdiction in which the failure took place or is taking place has nothing to do with the actual alleged crimes or misdeeds. Fraud, for example, happens in any country; it doesn’t turn on the jurisdiction.
“So, it isn’t useful in my view at this juncture to be wagging fingers saying this one’s at fault and the next one’s at fault. The fact is there was a business failure and we need to find out who’s responsible and if we can get recovery for those people who were damaged.
“Those people who did wrong should be punished and that’s what going on now.”
As the dramatic implosion of FTX played out last month, the Securities Commission of The Bahamas announced it froze the assets of FTX Digital Markets and related parties, suspended the registration, and applied to the Supreme Court of The Bahamas for the appointment of a provisional liquidator.
Mitchell suggested the failure of what was once the second largest cryptocurrency exchange in the world does not reflect negatively on the Bahamian people.
“Six million or so American tourists come here every year; they enjoy great vacations; they have a good interchange with our people; there’s no negative associated with it,” he said.
“So, those who suggest that because this failure in some part happened in The Bahamas that this somehow says something about our own people, I think those are misjudgements.”
In the House of Assembly last month, Prime Minister Philip Davis said he has every confidence that The Bahamas will emerge from the proceedings involving FTX with “an enhanced reputation as a solid digital assets jurisdiction”.
Yesterday, the foreign minister was also asked to respond to an assertion made by the new FTX CEO John Ray III that Bahamian authorities are not being forthcoming with information in the wake of the collapse.
“The issue is there’s no point in my view of making allegations,” Mitchell said.
“…So, it seems to me that if we’re both after the same issue, the whole question is can you cooperate together to get to the bottom of the problem.
“The problem is who did wrong, can we punish those who did wrong, and can we get compensation for those people who have suffered loss. The rest of it, I’m not sure that is useful to go down that road.”
Ray made the allegation on Tuesday during a hearing of the US House Committee on Financial Services, which is investigating the failure of FTX.
There is an ongoing dispute between the Bahamian appointed joint provisional liquidators and Ray over access to company files and assets.
In an indictment unsealed on Tuesday, prosecutors for the Southern District of New York allege that Sam Bankman-Fried, the founder of FTX conspired with others to commit wire fraud, commodities fraud, securities fraud and money laundering.
SBF, as he is widely known, is also accused of conspiracy to defraud the United States and violate the campaign finance laws.
It total, he is charged with eight counts.
Bankman-Fried is on remand at The Bahamas Department of Correctional Services in Fox Hill in the eastern area of New Providence.
He has indicated that he plans to fight extradition to the United States.
Chief Magistrate Joyann Ferguson-Pratt denied Bankman-Fried bail on Tuesday and remanded him until February 8, 2023.
The Nassau Guardian learnt yesterday that his lawyers have filed a bail application in the Supreme Court and a hearing is expected on January 17.