Hi there and welcome to the most recent version of the FT’s Cryptofinance publication. This week, we’re revisiting The Bahamas.
May The Bahamas be about to throw sand into the US machine that’s prosecuting Sam Bankman-Fried?
The intriguing query got here to mild this week in a courtroom doc filed in New York by the defence group of the previous FTX chief.
His legal professionals are combating the prison case laid out final December by the Division of Justice, which incorporates allegations of wire fraud, conspiracy to commit cash laundering and conspiracy to violate marketing campaign finance legal guidelines.
There have been eight authentic expenses, which served as the unique foundation for Bankman-Fried’s extradition from The Bahamas to the US.
Since arriving again within the US Bankman-Fried has been handed new expenses, together with securities fraud and conspiracy to violate anti-bribery legal guidelines by paying $40mn to allegedly affect Chinese language officers. Bankman-Fried has pleaded not responsible to all counts.
However as a result of the later expenses weren’t a part of the unique settlement to extradite him, his authorized group say the counts needs to be dismissed. Most eye-catching, the US authorities appears to agree that the later expenses could also be dropped if The Bahamas authorities doesn’t play ball.
“The federal government will proceed on the brand new expenses . . . if The Bahamas consents to trial on these expenses, and won’t proceed on these counts if The Bahamas denies the federal government’s request,” the courtroom submitting reads.
The Bahamian authorities didn’t reply once I requested whether or not it might consent to the US pursuing the newest expenses going through Bankman-Fried.
This will likely not come as a shock contemplating that the nation has sought to divorce itself from the FTX scandal for the reason that firm collapsed on its shores eight months in the past.
Weeks after the collapse, attorney-general Leo Pinder was keen to stress that “over 100 corporations” within the FTX internet had been situated exterior The Bahamas.
Throughout my November go to to Nassau, Bahamian prime minister Philip Davis stated he discovered no “deficiencies” in his nation’s crypto rules that would have stopped the FTX collapse. As a aspect notice, The Bahamas had already engaged famend regulation agency Hogan Lovells to evaluation and assist replace its crypto guidelines.
However is the Caribbean nation actually about to place a critical dent within the US’s most eye-catching crypto enforcement case?
“From the DoJ’s perspective, the extra vital the case, the extra they may push each button to attain their goals. And I’ve to say, this case is among the many highest profile instances interval, not to mention white collar instances, for the DoJ,” one former federal prosecutor in Washington DC advised me over the telephone.
Teresa Goody Guillén, companion at BakerHostetler, factors out that superseding indictments are sometimes filed after an extradition.
“The defendant will object to the brand new crimes claiming that the extraditing nation didn’t consent to prosecuting or punishing him for the brand new crimes,” she advised me through e-mail.
And though The Bahamas might stand its floor, the US has been asserting the primacy of its personal overseas coverage pursuits within the Caribbean for greater than 100 years. The island nation can count on some warmth from American prosecutors if it chooses to not play.
“In all chance, given The Bahamas’s presumed curiosity in sustaining good relations with US regulation enforcement, the nation will grant the waiver and the federal government will proceed with the brand new expenses,” stated one American lawyer accustomed to the matter.
In any case, the defence legal professionals’ submitting is the most recent disagreeable reminder for The Bahamas that it’ll in all probability by no means divorce itself from the FTX scandal.
What’s your tackle the most recent FTX salvo between the US and The Bahamas? As at all times, e-mail me at firstname.lastname@example.org.
Singaporean state investor Temasek has cut the pay of the employees liable for its failed $275mn funding in FTX. The corporate stated it was “disenchanted” with the funding and the affect it had on its repute. Supposedly Temasek had accomplished an “intensive” eight-month due diligence of FTX in 2021.
A number of the finance trade’s largest names, together with Commonplace Chartered, Nomura and Charles Schwab, are constructing their very own digital markets buying and selling platforms within the hopes that fund managers will gravitate in direction of established names over opaque and lesser-known crypto exchanges. My colleague Nikou Asgari has the story here.
With reference to opacity in crypto markets, most of the largest names within the trade are (brace your self . . .) nonetheless dodging primary questions on their companies. Within the wake of the collapse of FTX and lots of different once-prominent crypto teams, regulators and shoppers alike are involved about trade transparency, but when the FT requested 21 of probably the most distinguished crypto corporations about their governance and dealing with of buyer belongings, many declined to share primary data. Try Martha Muir’s record here.
Binance’s grip on crypto is dwindling: the trade behemoth has misplaced 1 / 4 of its market share previously three months as a regulatory clampdown and the top of a free buying and selling promotion have clipped its wings. The corporate can also be finishing up a spherical of job cuts. Binance didn’t inform me what number of workers had been in danger and had been fast to say the cuts weren’t about “right-sizing” however as a substitute about expertise re-evaluation. My story here.
Whereas we’re at it, a mini scooplet on Binance: for the reason that begin of the yr it has tripled the amount of cash it pays to internationally famend regulation agency Hogan Lovells for its lobbying efforts on Capitol Hill. We lined the trade’s lobbying techniques within the US earlier this year. Throughout a time when America’s relationship with crypto is sophisticated at greatest, the parents at Hogan Lovells — who declined to remark — are definitely incomes their cash.
Soundbite of the week: A vanished CEO
Multichain, a . . . cross-chain router protocol (I do know, me neither) has served up a crypto basic this week.
The platform defined that the expertise points it had been experiencing just lately had been all the way down to “unforeseeable circumstances”, which turned out to be the mysterious vanishing of its chief govt. Dangerous sufficient however he gave the impression to be the one particular person with entry to vital servers operating the community.
“The group has accomplished all the pieces attainable to keep up the protocol operating, however we’re at present unable to contact CEO Zhaojun and procure the mandatory server entry for upkeep.”
Ah, nicely. Who might have predicted that leaving the digital workplace keys within the arms of 1 particular person could create issues? In crypto land, this sort of occasion is simply referred to as Wednesday.
Information mining: Tether’s dominance grows
Tether is busy reaching new highs within the stablecoin market. It has been nicely documented in latest editions of this text that crypto buyers are fleeing offshore and Tether’s rivals — akin to Circle — have their very own points to fret about earlier than making an attempt to catch as much as the stablecoin pacesetter, however this week, Tether hit one other milestone.
Based on numbers shared with me by CCData, its present market share of 64.4 per cent is the very best level reached by the BVI-registered firm since April 2021.
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