Other startups are working alongside the Caribbean Blockchain Alliance, a non-governmental organization advocating for the adoption of blockchain technology in the region. Stephen Delevo, president of the organization, describes the crypto scene in the Bahamas as “small but active and growing.”

Neither Bain nor Delevo expressed particular concern about FTX’s impact on the local crypto business. With the exception of a few companies that were waiting for direct funding from FTX’s venture capital arm, Bain says “the mood in Crypto Isle hasn’t changed.” Delevo points to the “tremendous potential” of a local grassroots crypto movement that is “absolutely ready to move on” from FTX.

However, others see things a little differently. While Reese is confident in the quality of Bahamian crypto startups, he says the FTX crash is “not good for the industry.”

In particular, he is concerned that people do not usually distinguish between the actions of a company (or several individuals in a company) and the industry and country in which it operates. As a result, crypto companies in the Bahamas face a restriction – even firms like Kanoo Pays, which work primarily with central bank digital currencies (CBDCs), which is the antithesis of decentralized cryptocurrencies such as Bitcoin.

In the two months since the FTX crash, the Bahamas’ deliberate adoption of crypto has come under the microscope, along with their approach to regulating the industry. And Philip Davis, Prime Minister of the Bahamas, had to go on the defensive.

New crypto regulations under the DARE Act were proposed long before the FTX allegations. A the report published in April 2022 by the Government of the Bahamas set out a “vision” to further exploit the “excellent opportunity” presented by digital assets. But with the FTX crash, it makes for difficult reading.

The plan, which included provisions for crypto-trends such as non-fungible tokens (NFTs) and decentralized finance (DeFi), promised to cement the country’s reputation as a “leading hub for digital assets,” the report said, but also ensure that “only well-governed, reliable and thriving companies with digital assets that are able to … maintain the good reputation of The Bahamas can operate from the country.” Ai.

The Bahamas Securities Commission, which was consulted on the report, declined to comment on how the FTX collapse might affect regulatory reform. The Prime Minister’s Office did not respond to requests for comment.

But Malcolm says DARE could not include the alleged FTX fraud, which is covered by provisions that require businesses to “maintain appropriate controls, protect investor assets, [and] maintain adequate financial resources.” She describes the idea as a “massive mischaracterization” that paints an unfair picture of the Bahamas.

Bain also doesn’t disagree with the media’s portrayal of the country. Although the FTX disaster dealt a heavy blow to global cryptocurrency industry, she says the specific impact on the Bahamas has been “exaggerated”: “This idea that FTX has left a gaping hole in our economy or the fabric of our society is simply not true.”

If any country can recover from such a reputational setback, Reese says, it’s his own. To the extent that any nation can have a unified worldview, Rhys argues that the Bahamas is relentlessly optimistic. “The Bahamas is the Bahamas,” he says. “We were here yesterday, we will be here tomorrow.”


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