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Bahamas in talks with ‘more than a dozen’ crypto companies despite FTX collapse
The Bahamas’ legal affairs minister said the country does not believe in “overregulation” even after the collapse of cryptocurrency exchange FTX on its shores as more digital asset companies flock to the island.
Ryan Pinder, who is also the attorney general of the Bahamas, told Financial News that “more than a dozen” global cryptocurrency companies are in talks to enter the jurisdiction amid a market recovery and updates to the country’s digital asset rules.
The Bahamas began developing its Digital Assets and Registered Exchanges Act in 2019, which received parliamentary approval the following year.
“We were one of the first countries to regulate the digital asset space. FTX and several digital asset companies applied for a license and FTX got approval in September 2021. FTX was only in the Bahamas for a year before it collapsed,” Pinder told Financial News.
The collapse of Sam Bankman-Fried’s FTX was the biggest in cryptocurrency history. The exchange was valued at $32 billion before it went under.
FTX’s main entity and its founder, Sam Bankman-Fried, were based in the Bahamas, which caused damage to the Caribbean nation’s reputation.
“When FTX came out, they were the gold standard. But the truth is that the gold standard can also collapse. Whenever you have a shock event, there is a wait-and-see approach. That’s what happened after the FTX collapse,” Pinder said.
“However, we have not seen anyone leaving the jurisdiction. Digital asset exchange OKX is also licensed in the jurisdiction and is still operational,” he added.
The Bahamas is now working on a revised version of the Digital Assets and Registered Exchanges Act, which Pinder said is expected to be passed in the coming weeks and will weed out “bad actors.”
“We don’t believe in over-regulation. We want businesses to thrive. We believe in enough regulation that sets us apart from others,” he said.
The digital asset market was hit hard by high-profile bankruptcies during the crypto winter of 2022. Along with FTX, BlockFi, Celsius, Voyager Digital, and Three Arrows Capital also went bankrupt in 2022. Exchange giant Binance was fined $4.3 billion by US regulators last year.
But things started to change this year amid spot bitcoin ETF approvals in the U.S. and growing institutional adoption. Banks, asset managers and hedge funds started betting big on the emerging asset class again.
Bitcoin hit an all-time high of $73,000 in March but has fallen about 16% since then.
Write to Bilal Jafar in bilal.jafar@dowjones.com