Bahamas AG defends his investigation into SBF and FTX while pointing fingers at the rest...

Cal Jeffrey

Posts: 3,713   +1,162
Staff member
A hot potato: The controversy over the catastrophic implosion of FTX is stirring the pot between investors and officials. Those who lost money claim the Bahamian government is shielding FTX and Sam Bankman-Fried from the potential consequences of mishandling their funds. The backlash prompted the country's attorney general to go on the defensive in a live-streamed statement that almost nobody watched.

Bahamas Attorney General L. Ryan Pinder spoke out over the weekend regarding the FTX collapse and the public's interest in the legally "free" status of Sam Bankman-Fried (SBF). The AG live-streamed the presser via the Bahamas Office of the Prime Minister's Facebook page, where it racked up a whopping 623 views (embedded below via YouTube repost).

Pinder assured the public and investors that Bahamian regulators are doing their jobs by conducting due process and not buying into the mob mentality that wants to see SBF hung by the neck until dead.

"The Bahamas is a place of laws. The rule of law and the exercise of due process characterize the integrity of our jurisdiction," the AG said.

Investors feel the country's officials are harboring a criminal and accusing it of being a haven for crypto money laundering. Officials even challenged an FTX bankruptcy filing in Delaware earlier this month, claiming it has jurisdiction over the company's liquidation.

On the one hand, due process is undoubtedly prudent in a free nation. Gathering a case against SBF before filing charges is precisely what would happen in the US or UK. On the other hand, people who lost virtually every penny they invested are outraged that authorities haven't made an arrest. After all, it seems evident that there was some blatant mishandling of FTX investor funds.

Bankman-Fried spent millions bailing out other failing cryptocurrencies. He paid sports teams, athletes, and celebrities to promote his coin. The cryptopreneur also went on record admitting that he lost billions in FTX funds in another of his ventures called Alameda Research.

In a text-message interview with Vox, SBF said Alameda went under because it invested heavily in LUNA stablecoin, which also tanked earlier this year. Bankman-Fried avoided mentioning how much it lost and where Alameda spent that money. His excuse for the loss was "messy accounting."

However, it is another area due for investigation, considering that Wall Street Journal sources said SBF and other execs were well aware FTX gave about half of its investors' money to Alameda — funds that evaporated between May and June of this year.

In the meantime, investors have their pockets turned out while SBF is still supposedly sitting in his Bahamian palatial estate. Indeed many have concluded that they will never get their money back and want the satisfaction of seeing SBF behind bars, but that could be a while.

Pinder stated that his investigation was "very complex" and is only in the "early stages."

"We understand the enormous interest in this story, but as a government, we decided right away that what was most important was not to engage in speculation or gossip but instead to proceed methodically and deliberately in accordance with the exercise of due process and the rule of law," the AG said. "There is still no agreed-upon standards globally. Regulators from around the world are still grappling with how to regulate digital assets."

Pinder continually harped on how other countries should have done their part in keeping their eye on FTX since it operated globally. Of course, this flies directly in the face of his office's insistence that it be given complete jurisdiction over FTX's bankruptcy hearings.

"Any attempt to lay the entirety of this debacle at the feet of the Bahamas because FTX is headquartered here would be a gross oversimplification of reality," Pinder admonished. "We have been shocked at the ignorance of those who assert FTX came to the Bahamas because they did not want to commit to regulatory scrutiny. In fact, the world is full of countries in which there is no legislative regulatory authority over the crypto and digital asset business."

Pinder seemed to spend just as much time pointing out that investors should not point fingers at the Bahamian government as he did reassuring them he was doing everything he could to uncover what happened and hold parties responsible if necessary. The problem is that his voice is mostly falling on deaf ears.

Image credit: Marco Verch

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psycros

Posts: 4,552   +6,856
"There is still no agreed-upon standards globally. Regulators from around the world are still grappling with how to regulate digital assets."

Then it shouldn't be possible to convert them to and from cash. Crypto should stay relegated to the realm of the paranoid off-grid types until we find some way to make it less volatile than a teenage girl's fashion sense.
 

Uncle Al

Posts: 9,363   +8,581
It's' a shame they won't honor anyone's extradition requests or that the FBI could go round them up, but it's been a well known haven for criminals and their money for a very long time with little if any chance of it changing in our lifetime .....
 

Neatfeatguy

Posts: 1,086   +1,972
"There is still no agreed-upon standards globally. Regulators from around the world are still grappling with how to regulate digital assets."

Then it shouldn't be possible to convert them to and from cash. Crypto should stay relegated to the realm of the paranoid off-grid types until we find some way to make it less volatile than a teenager's pronoun choice for the day.

Fixed that for you.
 

yRaz

Posts: 4,958   +6,407
"There is still no agreed-upon standards globally. Regulators from around the world are still grappling with how to regulate digital assets."

Then it shouldn't be possible to convert them to and from cash. Crypto should stay relegated to the realm of the paranoid off-grid types until we find some way to make it less volatile than a teenage girl's fashion sense.
I may often come off as pro-crypto but I'm actually watching the crypto experiment and seeing that it hasn't run it's course yet.

People who put their money in an exchange made a mistake that by doing so that crypto was suppose to fix. Crypto is suppose to take money out of the hands of people who would like to steal it from us, IE, banks, and governments.

People who put their money in FTX are fools. The idea behind crypto is to give you MORE control over your money, not less. We have seen these scams happen with real money and in the stock market, but money gets laundered and stolen all the time without crypto. I mean lets not forget how the banks stole trillions in the 2008 financial crisis and they did that "legally" with a government issued and backed currency.

Now I'm going to call this an expect hiccup with people who don't know how crypto works giving a bunch of kids billions of dollars to play with. Buy whatever coin you want from an exchange and withdrawal that coin into an offline wallet. When I had crypto, I no longer do, I had stored in an encrypted Linux VM and a stored a copy of that on my NAS and in the cloud.

One could argue about how that's too much work and I'd say, yeah. Banks provide a lot of the infustructure for 'safely" storing financial information and there is value in the service. Now banks do have to insure peoples money up to $250,000 but that regulation only popped up after the 2008 financial crisis and it has yet to be tested. Frankly, so long as fractional reserve banking is a thing this will always be a risk.
 

emmzo

Posts: 807   +1,244
I may often come off as pro-crypto but I'm actually watching the crypto experiment and seeing that it hasn't run it's course yet.

People who put their money in an exchange made a mistake that by doing so that crypto was suppose to fix. Crypto is suppose to take money out of the hands of people who would like to steal it from us, IE, banks, and governments.

People who put their money in FTX are fools. The idea behind crypto is to give you MORE control over your money, not less. We have seen these scams happen with real money and in the stock market, but money gets laundered and stolen all the time without crypto. I mean lets not forget how the banks stole trillions in the 2008 financial crisis and they did that "legally" with a government issued and backed currency.

Now I'm going to call this an expect hiccup with people who don't know how crypto works giving a bunch of kids billions of dollars to play with. Buy whatever coin you want from an exchange and withdrawal that coin into an offline wallet. When I had crypto, I no longer do, I had stored in an encrypted Linux VM and a stored a copy of that on my NAS and in the cloud.

One could argue about how that's too much work and I'd say, yeah. Banks provide a lot of the infustructure for 'safely" storing financial information and there is value in the service. Now banks do have to insure peoples money up to $250,000 but that regulation only popped up after the 2008 financial crisis and it has yet to be tested. Frankly, so long as fractional reserve banking is a thing this will always be a risk.
The problem is all these fantasies and bullsh1t stories of what crypto was intended to be didn't work in rl. It was going to be an alternative currency. It was going to be a store of value. It was going to be an inflation hedge. The story kept changing. But the fact is, all you crypto pundits blaming the traditional financial system, without it, it doesn't grow, it doesn't work. It needs people like SBF. It thrives on fraud. It thrives on the worst of a traditional financial system. And at the end of the day, it becomes just a very speculative asset class with an immense cost structure built around it and nothing else.
 
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yRaz

Posts: 4,958   +6,407
The problem is all these fantasies and bullsh1t stories of what crypto was intended to be didn't work in rl. It was going to be an alternative currency. It was going to be a store of value. It was going to be an inflation hedge. The story kept changing. But the fact is, all you crypto pundits blaming the traditional financial system, without it, it doesn't grow, it doesn't work. It needs people like SBF. It thrives on fraud. It thrives on the worst of a traditional financial system. And at the end of the day, it becomes just a very speculative asset class with an immense cost structure built around it and nothing else.
I'm not a crypto pundit or whatever you're trying to call me. Fact of the matter is that crypto is used very much in good ways that don't get talked about. It's not as fun or clickbait worthy to talk about Chinese journalists who's thriving on crypto because the CCP freezes their bank accounts.

And let me put something in perspective from the the majority of the money invested in FTX was big Wallstreet banks and hedge funds. Your bank likely took your money and invested it in crypto. In a system where we use fractional reserve banking it's perfectly legal for your bank to invest your money and lose it.

Now your money is allegedly FDIC insured for upto $250'000, but we've never had a precedent sent where it actually. The big problem with the FTX scandal is that he was stealing from banks gambling with YOUR money, not individuals.
 

AlaskaGuy

Posts: 741   +611
It's' a shame they won't honor anyone's extradition requests or that the FBI could go round them up, but it's been a well known haven for criminals and their money for a very long time with little if any chance of it changing in our lifetime .....
I don't see the FBI going after him tbh.


 
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emmzo

Posts: 807   +1,244
I'm not a crypto pundit or whatever you're trying to call me. Fact of the matter is that crypto is used very much in good ways that don't get talked about. It's not as fun or clickbait worthy to talk about Chinese journalists who's thriving on crypto because the CCP freezes their bank accounts.

And let me put something in perspective from the the majority of the money invested in FTX was big Wallstreet banks and hedge funds. Your bank likely took your money and invested it in crypto. In a system where we use fractional reserve banking it's perfectly legal for your bank to invest your money and lose it.

Now your money is allegedly FDIC insured for upto $250'000, but we've never had a precedent sent where it actually. The big problem with the FTX scandal is that he was stealing from banks gambling with YOUR money, not individuals.
That was my point, without Wallstreet, hedge funds, banks, crypto would have never taken off. Chinese journalists great! How about all kinds of drug dealers, money launderers and such? Besides the story seems far fetched. You can't buy sh1t with crypto in China. They could change it for real money, but... they need a bank account. But forget about China, everything you buy with crypto is instantly exchanged. You don't pay fees to a bank, you pay bigger fees to an exchange. The only "free" exchange is P2P where you risk getting conned.
 
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Uncle Al

Posts: 9,363   +8,581
I don't see the FBI going after him tbh.



Only because they have no jurisdiction there. With the allegations that Sam Bankman-Fried moved (stole) several billion dollars there and has moved there to shield himself from prosecution you can bet the FBI would be on top of it, if they could, if no other reason that some prominent people and companies were fleeced out of their money. Crypto-currency has always be highly unstable and this is the best example of what can happen.
 

yRaz

Posts: 4,958   +6,407
That was my point, without Wallstreet, hedge funds, banks, crypto would have never taken off. Chinese journalists great! How about all kinds of drug dealers, money launderers and such? Besides the story seems far fetched. You can't buy sh1t with crypto in China. They could change it for real money, but... they need a bank account. But forget about China, everything you buy with crypto is instantly exchanged. You don't pay fees to a bank, you pay bigger fees to an exchange. The only "free" exchange is P2P where you risk getting conned.
Drug dealers use dollars, art and casinos to launder money all the time. There are plenty of cashless ways criminals have been laundering money long before crypto. So, yes, they use crypto to launder money but it is far from the first or only way to do so. Crypto has also been important for Ukrainian and Russian refugees who don't support the war.

I will not ignore the bad side of crypto, I actually talk about the bad sides in almost every one of my posts. My point is that it isn't as black and white as people want it to be. The more we compare it to "legal" financial institutions the grayer both sides become.

Crypto does a lot bad in good countries and a lot of good in bad countries. But I'd like to point out that just because something is legal doesn't make it right and just because something is illegal doesn't make it wrong.

The headlines about the good crypto are not as glamorous as things like FTX and the media has no real incentive to write about them. They aren't directly against crypto, it's just that those types of articles don't drive traffic to the website and therefore advertising revenue
 
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