The Bahamas’ endangered status as a crypto hub

The Bahamas’ endangered status as a crypto hub

In the days following the collapse of the Bahamas-based FTX, the Securities Commission of the Bahamas kept a low-profile, releasing a trickle of press releases and hanging up the phone on inquiring journalists.

That changed with a bombshell on Thursday night, when the agency—a kind of supercharged version of the U.S. Securities and Exchange Commission—announced that it had directed FTX’s Bahamian subsidiary to direct the transfer of all its digital assets to a wallet controlled by the Commission “for safekeeping.”

The move was a remarkable display of power for the small Caribbean nation, which spent years burnishing its reputation as an emerging hub for crypto—a campaign that culminated in enticing the founder of FTX, and his crew, to move their headquarters to the country in September 2021.

FTX’s arrival was a coup for the Bahamas and its prime minister, but, now that the once-vaunted company has collapsed amid allegations it was a $30 billion Ponzi scheme, the country’s crypto ambitions may be in jeopardy.

Fortune interviewed government officials, crypto entrepreneurs, and legal experts to reveal how the Bahamas built its reputation as a global hotspot for digital assets. Now, as the SCB and government try to save the country’s reputation, the question is whether