Collapse ‘bewilders’ FTX Bahamas staff


Tribune Business Editor


FTX’s 40 Bahamian staff have been left “bewildered and beleaguered” by the speed of the crypto exchange’s collapse, a senior executive says, amid hopes its $74m real estate outlay will prove a key recovery source for local creditors.

Valdez Russell, FTX Digital Markets’ vice-president of communications, told Tribune Business that “many” of the expatriate workers brought in by the Bahamian subsidiary have already left the country after the company last week imploded in one of the most rapid and spectacular corporate collapses in world history.

Confirming that FTX’s co-founder and former chief executive, Sam Bankman-Fried, remains holed up in The Bahamas will regulators, police and provisional liquidators comb through the wreckage of an empire valued at $32bn just weeks ago, he added that local staff “remain engaged” at present albeit facing a very uncertain immediate future.

“I believe it’s fair to suggest that staff are bewildered and beleaguered by what has happened, while at the same time being appreciative of the opportunity afforded to transform the digital assets space right here in The Bahamas,” Mr Russell told this newspaper. “That’s genuine. Persons are heartbroken.”

Another FTX worker, speaking on condition of anonymity, voiced much stronger emotions that Mr Russell. They expressed that they felt “betrayed” by Mr Bankman-Fried and the group of senior executives around him, having trusted him sufficiently to leave an existing well-paying job to help realise his crypto currency dreams for The Bahamas.

“Betrayal. Just an enormous feeling of betrayal and that guts you,” they said. “I was speaking to a colleague and they feel as gutted as anybody else, as they followed someone they trusted wholeheartedly only to be betrayed at an extraordinary level.”

Brian Simms KC, senior partner at the Lennox Paton law firm, who has been appointed as provisional liquidator for FTX Digital Markets by the Supreme Court, will likely meet the Bahamian subsidiary’s staff this week after being locked in a series of meetings, briefings and document reviews over the weekend in a bid to gain control of its assets (bank accounts) and get a grip on the task he faces.

Head of Lennox Paton’s litigation practice, he represented Baha Mar’s lender, the China Export-Import Bank, in the dispute over the $4.2bn project - an experience that will serve him in good stead given that this dispute has also ended up in the Chapter 11 bankruptcy protection court in Delaware just like the Cable Beach mega resort.

Mr Russell, meanwhile, voiced optimism that FTX’s investments in western New Providence real estate will prove a valuable recovery source for what is owed to staff, Bahamian vendors and clients of FTX Digital Markets. Tribune Business reported last week how FTX has acquired some $74.23m in west New Providence real estate during 2022 alone.

Most of these purchases involved property in the high-end Albany community, along with the acquisition of units in the Veridian Corporate Centre, which was developed by Island Luck gaming tycoon, Sebas Bastian. The acquisitions by FTX Property Holdings, the crypto exchange’s real estate arm, ranged in value from a high of $30m to $8.9m, $7.479m, $7.311m, $7m and $6.75m at Albany, according to the report, which was being widely circulated on social media.

Some $4.5m was also spent to acquire the Bayside Executive Park site for its planned $60m headquarters, which is now unlikely to proceed, but sits directly across from Mr Simms’ offices at Lennox Paton. A report also showed a $2.29m purchase at the Veridian Corporate Centre.

“The corporate offices for FTX are currently housed at the Veridian Corporate Centre, which was originally built and sold by Sebas Bastian,” the document said. “These are not rentals or leases. FTX has purchased these units outright. 

“Additionally, there is one purchase of a condominium at One Cable Beach for $2m made by Sam Bankman-Fried directly in late 2021.” It is unclear whether the latter, especially given that it is in the FTX founder’s name, will be included in the provisional liquidation.

“We’ve made significant real estate investments on the western end of the island,” Mr Russell added. “These were designed to establish our home in The Bahamas. I’m banking on those investments being a key factor in allowing Bahamian employees, vendors and customers to be attended to in the best possible way.

“As we try to make it right, the good thing is The Bahamas has an opportunity to demonstrate to the world that as a compliant jurisdiction we will work within the law to ensure parties in our jurisdiction act in good faith in all regards.” In addition to FTX’s real estate, Tribune Business understands that another valuable source of recovery could be FTX’s technology platform, the exchange itself and its licence.

Meanwhile, Deltec Bank & Trust yesterday denied speculation circulating widely in the financial services industry that its acquisition in March 2022 of Ansbacher Bank & Trust was financed by a loan from FTX. “We have been made aware of the rumours related to the acquisition of Ansbacher (Bahamas) by Deltec Bank & Trust that are unfounded and unsubstantiated,” Deltec said.

“Firstly, we would like to make it clear that this rumour is malicious and completely baseless. The latest independent auditor’s report shows that Deltec Bank is well capitalised. Additionally, the bank carries no debt and is not a creditor to FTX....

“While we are all saddened by the news surrounding FTX, we urge the financial services community to act responsibly and not spread rumours that are frivolous and attempt to damage the reputation of financial institutions in the jurisdiction. During such a fragile point in our industry, we must focus on facts and actual events.”

Michael Pintard, the Opposition’s leader, last night urged the Government to speak publicly to the FTX collapse. He added: “The Government’s much-touted proposed carbon credit trading platform was announced to be facilitated through FTX’s exchange platform.

“Given current events, what impact will this development have on the potential for carbon trading. What alternative arrangements are being made, and when will we see the first trade and benefit from this activity, if any? Has the Government begun to estimate the loss exposure of the private sector as a result of FTX apparent collapse and the personal losses of Mr Bankman-Fried and his colleagues? What measures are being taken to protect Bahamians from any anticipated loss?”

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