Government officials and stakeholders at the groundbreaking ceremony for the FTX Community Center to be built Over-the-Hill and managed by Lend A Hand Bahamas.
NASSAU, BAHAMAS — FTX’s future in The Bahamas appears uncertain after it was revealed yesterday that its rival—crypto giant Binance—would acquire the company amid liquidity concerns.
Binance founder Changpeng Zhao and FTX founder Sam Bankman-Fried have been engaged in a months-long social media spat which escalated earlier this week. In a surprising turn of events, Zhao announced that Binance, which was the first investor to back FTX, had signed a non-binding letter of intent with the company to cover the liquidity crunch after the company had reached out for help.
Binance is considered the world’s most valuable crypto exchange, estimated to be worth over $300 billion.
Bankman-Fried had initially denied insolvency rumours after Zhao’s announcement that his firm was liquidating its FTT holdings helped give credence to rumours over the financial health of his trading firm Alameda Research whose balance sheet is full of FTX’s, FTT token.
Valdez Russell, Vice President of Communications & Corporate Social Responsibility at FTX Digital Markets in response to Eyewitness News’ queries regarding the impact of the developments on FTX’s local operations and future, referred to Bankman-Fried’s post on Twitter.
The tweet read: “Things have come full circle, and FTX’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for FTX(pending due diligence etc.).
“Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. – we apologize for that. A huge thank you to CZ, Binance, and all of our supporters. This is a user-centric development that benefits the entire industry. CZ has done, and will continue to do, an incredible job of building out the global crypto ecosystem, and creating a freer economic world.”
Securities Commission Executive Director Christina Rolle did not return calls for comments on the developments regarding FTX yesterday. liEarlier this year Bankman-Fried stated that The Bahamas has become a jurisdiction to be envied having attracted FTX to its shores. The introduction of the Digital Assets and Registered Exchanges Bill is said to have played a key role in attracting the crypto giant to this jurisdiction from Hong Kong.
FTX revealed earlier this year that it was looking to invest around $60 million towards the development of a boutique hotel, commercial centre, and its new headquarters on nearly five acres of land at Bayside Executive Park.
Yesterday, Gowon Bowe, CEO of Fidelity Bank said: “I think there are a couple of things that we have to bear in mind. One of them is that there has been corporate warfare between these two entities for an extended period.
“Secondly, the primary elements that have been raised are in relation to Alameda which is the private trading firm of Sam Bankman-Fried and not the crypto exchange itself. I think it is important that we allow the details to emerge and separate between what I call high-stakes finance and the integrity of trading platforms and digital assets.
“Digital assets are volatile and high-risk securities and when you get into that game you need to be aware that you are taking on risks and well versed in what you are doing. In the same token, it does mean that the exchange or underlying exchange of cryptocurrency has come under that.”
Bowe added: “I think it’s important that we don’t go into too much speculation and allow the situation to play itself out so we can appreciate what is happening. I don’t think this is going to be any reflection on the jurisdiction. We should not be running for the hills or in absolute panic mode. There is uncertainty which could be positive or negative.
“There is a distinct possibility that The Bahamas operations will become a part of what Binance is looking at in its long-term future. As it relates to the plans the current shareholders of FTX have, they may change but that doesn’t mean that new plans may not merge from the new shareholders of FTX if and when that deal is consummated.”
