FTX Faces Criminal Misconduct Probe By Bahamas Police And Local Securities Commission

inancial investigators from the Royal Bahamas Police Force confirmed that they are currently working with the Bahamas Securities Commission and looking into possible criminal misconduct surrounding the surprising implosion of the second-largest cryptocurrency exchange platform FTX.

"In light of the collapse of FTX globally and the provisional liquidation of FTX Digital Markets Ltd., a team of financial investigators from the Financial Crimes Investigation Branch are working closely with the Bahamas Securities Commission to investigate if any criminal misconduct occurred," the Royal Bahamas Police Force (RBPF) said in an official statement released Sunday.

The RBPF, however, did not reveal which aspect of FTX's fall from grace the ongoing investigation is looking into or if it is in any way a response to the "hack" Friday night, which saw $650 million leave the platform. The official statement from the police came after the Bahamas Securities Commission froze FTX's assets and suspended its registration Thursday to "preserve assets and stabilize the company."

Sam Bankman-Fried, or SBF, the former CEO of previously one of the most trusted brands in the cryptocurrency space, co-founder Gary Wang and director of engineering Nishad Singh are reportedly in the Bahamas and "under supervision" by local authorities. Caroline Ellison, the CEO of Alameda Research, the company which was founded by Bankman-Fried in 2017, was allegedly in Hong Kong and wanted to go to Dubai.

"Right now three of them, Sam, Gary, and Nishad are under supervision in the Bahamas. Which means it will be hard for them to leave," an anonymous source reportedly told Cointelegraph. "I just got word that they were trying to find a way to get to Dubai, which doesn't have an extradition treaty," the tipster added.

SBF and his fellow FTX executives had been detained at the Bahamas Airport on Thursday where his private jet was grounded for 40 minutes, reports said. On Saturday, he confirmed to Reuters via a text message that he is in the Bahamas, refuting rumors online that he was in Buenos Aires.

Bankman-Fried was questioned by the Royal Bahamas Police on Saturday night, Bloomberg reported. This aligns with the tweet from verified Twitter user Mario Nawfal who claimed that SBF was seen in the lobby of the Albany Marina Towers (where he lives) with members of the police and regulators.

FTX was previously based in Hong Kong but moved its headquarters to the Bahamas in September 2021. At the time, SBF said the Caribbean tax haven was a better place to do business and had more regulatory clarity compared to Hong Kong.

Following the move, SBF, along with 10 of his colleagues lived in a mansion in the Bahamas. Bankman-Fried described the country at the time as "one of the few places to set up a comprehensive framework for crypto."