Ryan Pinder, Attorney-General and Minister of Legal Affairs for The Bahamas, held a late Sunday press conference to defend the "integrity of our jurisdiction," asserting that—despite his country's reputation as a "crypto paradise" and haven for cryptocurrency schemes—"The Bahamas is a place of laws."
The 20 minute address, broadcast live online, mentioned the failed cryptocurrency exchange FTX more than 40 times, but named its disgraced founder, Sam Bankman-Fried, only once.
"We have been shocked at the ignorance of those who assert that FTX came to the Bahamas because they did not want to submit to regulatory scrutiny," Pinder said. "In fact, the world is full of countries in which there is no legislative or regulatory authority over the crypto and digital asset business, but The Bahamas is not one of these countries."
Pinder acknowledged "the enormous interest" in the FTX case, but warned that "the basic facts have been obscured by guessing games and rumors."
The Bahamanian official recapped the series of events that led to the FTX crash, noting that Alameda Research currently remains outside his jurisdiction—unless the firm "is found to have committed any improprieties in the Bahamas."
Pinder also pointed out that the failure of FTX was only one failure in a string of business failures in recent months.
"On a basic level, recent events involving the insolvency crisis experienced by the FTX group of companies have been experienced around the world in practically every sector," Pinder said. "What happened can more readily be understood as a case of a very large business failure as a result of questionable internal management practices and corporate governance."
Pinder was born in The Bahamas but attended high school in New York and graduated with an MBA and law degree from the University of Miami.
After returning to his home country and serving in parliament for several years, he notably left public service in 2014 to take what he described as a "mind blowing” deal to serve as Chief Legal Officer at Bahamas-based Deltec Bank & Trust.
Deltec Bank has ties to FTX: it counts stablecoin issuer Tether among its clients, and its chair, Jean Chalopin, is also the chairman of FTX-owned Farmington State Bank in Washington State, according to a New York Times report.
Late last year, the bank touted a visit with Pinder in his new role as attorney general, where they discussed The Bahamas’ efforts to position itself as the hub for blockchain technology and digital assets.
The connection has prompted at least one call for Pinter to recuse himself from the case.
While presenting his government's case Sunday, Pinder pointed out that the Securities Commission of The Bahamas was taking the lead as the statutory regulator of FTX and other companies in the digital asset space. He specifically called out "two significant statements concerning the provisional liquidation proceedings," including the commission's order to freeze FTX assets, and transferring them to a wallet it controls "for safekeeping."
"The commission was the first regulator in the world to take significant steps with respect to the FTX group of companies, which has operations and regulated activities throughout the world," he said. "The Securities Commission was able to move so quickly because of the strength of the legislative framework, which was already in place in the Bahamas."
Pinder also took the opportunity to tout his government's early actions in both embracing and regulating the nascent crypto industry, and cited a Solidus Labs study that named The Bahamas as having the most "effective approaches to regulation that both protect consumers and encourage innovation."
"In the digital assets arena, what matters is not the size of your landmass, nor the size of your GDP, but the ingenuity and rigor of your people and your jurisdiction," he said. "I am fully confident that as matters progress, and the activities of the FTX group are either restructured or wound down, the Bahamas will emerge held in even higher esteem.
"A turbulent cryptocurrency period on a global basis, and the downfall of a single Bahamian company, in no way threatens a bright future for the Bahamas," he continued. "In fact, it's quite the opposite."
He closed his address with a call to entrepreneurs looking to create new financial projects.
"They can be certain that we have in place a principled, fair, comprehensive and ethical regulatory regime," Pinder said. "They will have found yet another reason why, 'It's better in The Bahamas.'"