FTX Destroyed Crypto Party in Heaven

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Over the next couple of years, a slew of startups and big crypto companies moved to the Bahamas, including FTX and OKX, another big crypto exchange. Separately, Tether, whose dollar-pegged stablecoin is central to the smooth functioning of crypto markets, holds its reserves with a Bahamian bank, Deltec Bank & Trust.

But already, signs of damage from FTX’s collapse to the Bahamas’ status as an emerging crypto capital are beginning to appear.

In December, SALT, the events company run by former White House communications director Anthony Scaramucci, announced the cancellation of Crypto Bahamas 2023. Another event, D3 Bahamas, hosted by the Bahamian government and presented as the country’s flagship Web3 and fintech festival, was supposed to take place in January, but has been postponed. A new date has not yet been set.

Carlyle Bethel, founder of real estate tokenization startup Akerage, was to pitch venture capital funding to D3 and describes the postponement as disheartening. His main concern is that the collapse of FTX has rattled potential investors, making it harder for startups like his to bring in the funding they need to scale.

When it comes to other Bahamas-linked global crypto firms, the response has been mixed. Tether is motionless; Paolo Ardoino, CTO, says that the FTX situation is in no way a reflection of the Bahamas and that Tether is strongly considering opening an office there. OKX, however, declined to answer questions about its commitment to the country.

Nassau is also home to a growing brigade of crypto startups, like the beachfront coworking space Crypto Isle, which aims to bring isolated groups of entrepreneurs together and create a space for people to learn about crypto, explains co-founder Davinia Bain.

Other startups are working alongside the Caribbean Blockchain Alliance, an NGO that advocates for the adoption of blockchain technology in the region. Stefen Deleveaux, president of the organization, describes the crypto scene in the Bahamas as small, but active and growing.

Neither Bain nor Deleveaux expressed any particular concern about the ripple effects FTX could have on local crypto businesses. With the exception of a few companies that were anticipating direct funding from FTX’s venture capital division, Bain says the mood at Crypto Isle hasn’t changed. Deleveaux points to the huge potential of the grassroots grassroots crypto movement, which is all set to transition from FTX.

Others see things a little differently, however. Although Rees is confident in the quality of Bahamian crypto startups, he says the collapse of FTX is not good for the industry.

Specifically, he worries that people generally fail to distinguish between the actions of a company (or a handful of individuals within a company) and the industry and nation in which it operates. . As a result, crypto companies in the Bahamas are facing a tarring even from companies like Kanoo Pays, which deal primarily in central bank digital currencies (CBDCs), the antithesis of decentralized cryptocurrencies like Bitcoin.

In the two months since FTX’s collapse, the Bahamas’ deliberate adoption of crypto has come under the microscope, along with its approach to industry regulation. And Philip Davis, Prime Minister of the Bahamas, had to get defensive.

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