In the two years since, a collection of startups and major crypto companies have established themselves in the Bahamas, including FTX and OKX, another major 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 done by the FTX to the status of the Bahamas as an emerging crypto capital are starting to show.
In December, SALT, the events company headed by former White House communications director Anthony Scaramucci, announced that the cancellation of Crypto Bahamas 2023. Another event, D3 Bahamas, run by the government of the Bahamas and billed as the country’s “flagship Web3 and financial technology festival” was due to take place in January but has been postponed. A new date has not yet been set.
Carlyle Bethel, founder of real estate tokenization start-up Akerage, is said to be pitching for venture capital funding at D3, describing the delay as “disheartening”. His main concern is that the collapse of the FTX has “shocked potential investors,” making it more difficult for startups like his to raise the funding they need to scale.
As for other global crypto companies associated with the Bahamas, the reaction has been mixed. Tether is unmoved; Paolo Ardoino, CTO, says the FTX situation is in no way reflective of the Bahamas and that Tether is “strongly considering” opening an office there. However, OKX declined to answer questions about its commitment to the country.
Nassau is also home to a growing brigade of crypto startups, such as the oceanfront coworking space Crypto Isle, which aims to bring isolated groups of entrepreneurs together and create “a space where people can learn about crypto,” says co-founder Davinia Bain.
Other startups are teaming up with the Caribbean Blockchain Alliance, an NGO that advocates for blockchain technology adoption in the region. Stefan Deleveaux, president of the organization, describes the crypto scene in the Bahamas as “small, but active and growing”.
Neither Bain nor Deleveaux were particularly concerned about the domino effects FTX could have on local crypto companies. With the exception of a few companies that expected direct funding from FTX’s venture capital division, Bain says that “the mood on Crypto Isle has not changed.” Deleveaux points to the “massive potential” of the local grassroots crypto movement, which is “pretty ready to move forward” from FTX.
However, others see things slightly differently. While Rees is confident in the quality of Bahamian crypto startups, he says FTX’s collapse is “not good for the industry”.
He is particularly concerned about the fact that people typically don’t distinguish between the actions of a company (or a handful of individuals within a company) and the industry and country in which it operates. As a result, crypto companies in the Bahamas are facing tar – even companies like Kanoo Pays, which mainly trades in central bank digital currencies (CBDCs), the antithesis of decentralized cryptocurrencies like Bitcoin.
In the two months since the collapse of FTX, the Bahamas’ wanton embrace of crypto has come under scrutiny, along with their approach to regulating the industry. And Philip Davis, Prime Minister of the Bahamas, had to go on the defensive.
