‘The money’s gone’: The Bahamas try to turn the page after FTX

NASSAU, Bahamas (AP) — Dressed in a canary blue suit on a warm December night, sweat dripping from his brow, Bishop Lawrence Rolle belted out the words of his final song to hundreds of children and adults who had gathered to celebrate Christmas.

“FTX!” He sings, bowing and nodding his head for emphasis. “The money is gone!”

“FTX!” His backup singer and the audience screaming. “The money is gone!”

Cryptocurrency exchange FTX was supposed to be the crown jewel in the Bahamas government’s push to be the global destination for all things cryptocurrency, after years of having an economy overly dependent on tourism and banking. Instead, FTX has gone bankrupt and the Bahamians are trying to figure out what’s next for their country and if their national crypto experiment has failed. Regulators are trying to identify the missing funds of FTX clients.

Meanwhile, charities like Rolle’s and dozens of contractors now out of work are hoping another company will come along and bring new opportunities to the island nation, without the complications and embarrassment of an alleged multibillion-dollar scam.

Rolle, a Pentecostal preacher known as the “Singing Bishop”, is a prominent figure in the Bahamas. For decades, he cooked food, donated it to the poor, and served school lunches from his neighborhood kitchen at the International Prayer Ministry in Over the Hill, one of the poorest areas of the capital, Nassau. Rolle and his staff feed approximately 2,500 people a week.

Rolle is invited by Kirby Samuel, principal of Mount Carmel Preparatory Academy, to sing as part of the school’s Christmas celebration. His work mostly consisted of a half-dozen Afro-Caribbean gospel songs, but one number one stood out – his social media hit about the recent breakup of FTX.

Rolle’s ministry received $50,000 from FTX in early 2022, one of several donations FTX made to the people of the Bahamas when it moved to the Caribbean island nation in 2021. It was money that was used to restore a food storage trailer and make additional food donations, he said. Roll said it costs over $10,000 a week to run his food donation program.

Asked about the failure of FTX, Rolle called it a sad distraction from the many issues facing the country. Others are angry, particularly at Sam Bankman FriedYoung founder of FTX. The Bahamas has a reputation, like some other Caribbean islands, as a destination for illicit and offshore financing. It was believed that cryptocurrency would allow the island to diversify its economy, give the Bahamas more financial opportunities and generally help provide for a more prosperous future for the country.

The country enacted the Digital Assets and Registered Exchanges Act in 2020, making the Bahamas one of the first countries to set up a regulatory framework for cryptocurrencies and other digital assets. The Premier, Philip Davis, participated in the groundbreaking ceremony for FTX’s new $60 million headquarters in Nassau in April, along with Bankman-Fried.

“Their arrival was kind of a culmination of the work Bahamians have done to move in this direction,” said Stephen Delevue, President and CEO of the Caribbean Blockchain Association.

Many other crypto companies and startups are headquartered in the Bahamas, some in an incubator known as Crypto Isle, not far from downtown Nassau.

Deleveaux said he became interested in cryptocurrency as early as 2014, and has mostly been trying to focus his foundations’ efforts on non-commercial parts of crypto, such as blockchain technology, financial inclusion and technological uses. Still skeptical about cryptocurrency trading.

“It’s frustrating. Now when people think of cryptocurrency, they’ll think of FTX,” Delvaux said. “This will make my job much more difficult.”

In some ways, said Bahamians, FTX was ubiquitous and removed from the local community. Its ads were everywhere, most notably at Nassau Airport in the Tourist Arrivals Hall. But at the same time, FTX ran most of its operations from the secure luxury complex known as Albany, where residents like Tiger Woods and Justin Timberlake could be spotted regularly. Albany is across from New Providence, the most populous island in the Bahamas and the location of Nassau.

“You don’t casually walk around Albany,” said Delvaux.

One bartender at a Margaritaville resort, where FTX ran an unpaid $55,000 tab, described a group of 10 to 15 mostly white FTX employees who were eating at the restaurant, faces buried in their laptops the whole time. While FTX employed or contracted to Bahamian companies, it was almost entirely for logistical functions such as construction, doorman services, or catering.

Once FTX became ingrained in elite circles in the Bahamas, the whole thing fell apart. FTX failed in spectacular fashion In early November, it went from fulfillment to bankruptcy in less than a week. One catering worker said he had to let go of most of his workers after FTX, his largest contract, went bankrupt.

Bankman Fried, 30, was arrested last month in the BahamasHe was extradited to the United States to face criminal charges In what US Attorney General Damian Williams called “one of the largest frauds in American history”. The floppy-haired crypto entrepreneur has been released on bail He is due to be tried in October.

Meanwhile, law enforcement and regulators in the United States and the Bahamas, as well as lawyers and FTX’s new management, are trying to determine how much investor and client money “was lost,” as Bishop Rolle frequently repeats in his song. Estimates of the amount of money lost in the FTX crash have varied widely, since some assets are still being recovered, but one estimate puts the losses at around $8 billion to $10 billion.

“Like the rest of the world, I’ve been glued to my TV since the[FTX]crash,” Samuel, director of Mount Carmel, said in an interview.

However, other Bahamians said the collapse of FTX distracted from the ongoing problems facing the Caribbean nation.

The Bahamas’ economy has been severely tested in the coronavirus pandemic. The country effectively banned overseas visitors for about two years, and only began allowing cruise ships to dock at its famous pier about eight months ago. In Nassau, there is widespread evidence of the economic toll of the pandemic. The British Colonial Hotel, best known for being the location of the James Bond movie “Never Say Never Again,” was closed and closed in February. Once the rooms went for $400 a night there.

Despite miles of pristine beaches, beautiful resorts, and the richest economy in the Caribbean, the Bahamas remains a country riven by inequality. Taxi drivers talked about not being able to get even a $6,000 loan to buy their own car. According to the country’s central bank, nearly one in five Bahamas does not have a bank account.

Late last year, the Bahamas government was forced to impose pricing restrictions on dozens of staple foods in a desperate attempt to combat inflation.

FTX officials seem to recognize food and hunger as an issue that must be addressed to develop goodwill with its new neighbors. In addition to the $50,000 donation to the Rolle Ministry, FTX donated $250,000 to Hands for Hunger and put $1.1 million into a new nonprofit organization known as the Agricultural Development Commission, focused on building the country’s food security. The committee’s founder, Philip Smith, did not respond to several requests for comment on the donation.

With FTX filing for bankruptcy, there was speculation in the Bahamian media as to whether Rolle should return the $50,000 donation, which he said was spent within about a month after receiving it.

“We cut this money as best we could, buying flour and rice,” Roll said. “There are many hungry people.”

“It is a difficult case for a bishop,” said Samuel of Mount Carmel, “but it is one thing I think every person in the country will agree with: whatever they gave him, he did not spend on himself.”

“I just wish there were better companies out there than FTX,” Roll said. “Many of our children do not have fathers, or we have parents who have two children or four or five children, or the children do not have a father. We can hardly feed them. I pray that someone will come and donate more.”

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