By LEANDRA ROLLE
Tribune Staff Reporter
FTX founder Sam Bankman-Fried yesterday denied claims of the company being non-compliant with the country’s digital assets regulations, insisting his team had spent an enormous amount of time “on regulations and compliance”.
The former FTX CEO said the company tried its best to do right by all the regulators it interacted with locally and added that for the most part, he was proud of the team’s response.
However, he acknowledged he was certain the company was “not as responsive as we could have been sometimes”, especially in the last month.
He also disagreed with the characterisation of The Bahamas’ digital assets regulatory regime in international media, saying he believed the commentary made was due to a “lack of awareness”.
“I mean, we never tried to throw regulation and compliance to the wind,” he said while appearing as a guest on “On The Record” with host Jerome Sawyer. The nearly hour-long interview was aired last night.
“We were spending more than half our time as a company, I think, on regulation and compliance by the end and you know, that was through here in The Bahamas, where we had, we built out an entire local team to interface with Bahamian regulators and behaviour and regulation.”
“You know, over the course of a year we transitioned, you know, most of the global business to the Bahamian entity, mostly customers to the Bahamian entity and this became the nexus of our global business. It was where minded management was. It’s where the bulk of the employees were.
“It’s where the technology was built and it’s where our primary regulator was with the Securities Commission here and so, there was an enormous effort and engagement on this part to shift a global business here which we did this year,” he also said.
FTX, Alameda Research, and “dozens other affiliated companies” filed a bankruptcy petition in Delaware last month after facing a liquidity crisis.
The firm’s collapse is currently being investigated by local and international law enforcement agencies, who are probing the handling of FTX customers’ funds.
“It was tough to see,” the FTX founder said of the crypto giant’s collapse. “It was a little bit shocking to see things unravel so quickly. And I had to try to adapt pretty quickly to doing the best I could, you know, given what had happened.
“I wish I’d been quicker than I was to make that change but everything came unravelling at the same time.”
Before FTX’s downfall, Mr Bankman-Fried said the company had enjoyed a good relationship with local regulators in The Bahamas, adding that he really appreciated having an “open line of communication” with the Securities Commission of The Bahamas.
“I’ve been in countries where, you know, I’ve been told that I absolutely needed to come in and register,” he said. “And then when we reach out to the regulators to register, they’re not taking meetings and at that point, I don’t know what to do next. That was never the case here. They always were interested, were curious, they always wanted to know more and welcomed engagement.”
As for his relationship with the Bahamian government, the former billionaire described Prime Minister Phillip “Brave” Davis as a great leader who has been “incredibly empathetic” and “incredibly well intentioned”.
“I think I’ve seen that more broadly with most of the government that I’ve interfaced with,” he added. “And I think it’s something that we saw, frankly, prior to the election last year here as well. I think we’ve seen it on both sides. It was an approach, which was constructive, which was practical, which got things done.
“...and I’ll tell you what I haven’t seen much of from the island. I haven’t seen that much focus on partisan bickering and look, obviously there is some. There always will be some and I don’t want to say that everyone has the same view on everything but when you look at what’s happening in the United States in DC right now, partisan bickering is most of what happens.”
When asked whether he had spoken with the Prime Minister or any other senior government official since FTX’s implosion, Mr Bankman-Fried replied he had been in contact with SCB, adding that those conversations were the “primary point of interface”.
When pressed on the issue again, Mr Bankman-Fried paused for a bit before answering.
He eventually replied: “We have made sure that we are responsive to anything that comes down.
“I think frankly and one of the reasons I had to think a bit for answering is it would be an easy answer if we had one member of the government who is telling us we had to do X no matter what, and some other members telling us we couldn’t do X no matter what and we were having separate meetings with different, you know, different ministers, different representatives that were conflicting, and managing that (but) we haven’t seen that.”
“But, we’ve seen has been a fairly cohesive, constructive approach here to the point that sort of intentions and actions that we’ve been seeing from different players, they’re all part of the same hole which is trying to do right by customers.”
The former FTX CEO also couldn’t recall ever being asked for anything by any government official but said the company has supported the country in the past by donating to local citisens and charities.
FTX Digital Markets, which is headquartered in The Bahamas, is the Bahamian subsidiary of FTX Trading Ltd, the owner and operator of FTX.
It was incorporated in The Bahamas in July 2021.
Earlier this year, the crypto exchange broke ground to start construction on its $60m headquarters.
The project, however, has since been put on hold, according to Mr Bankman-Fried.
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