India Won’t See Crypto or Web3 Bill for Another 18 Months, Senior Lawmaker Tells CoinDesk

“In India where we have capital controls when you can’t freely trade the rupee for us to enable crypto assets is not really feasible,” Sinha said. “Unlike other economies like Singapore, or Korea or the US that have freely tradable currencies, and can get into crypto with a lot less trepidation. As far as India is concerned, we have to be very, very careful, very, very cautious when we talk about crypto. But crypto friends is just one use case for what is a revolutionary set of technologies that underlie Web3.”

Ravi Menon: Singapore’s Middle Way Regulator

The head of Singapore’s central bank has been one of the most influential policymakers in Asia, arguably the most vibrant region currently for crypto development. As Managing Director of the Monetary Authority of Singapore (MAS), Ravi Menon, 59, has steered the institution toward a middle path between Hong Kong’s favorable crypto regulations and the just-ban-crypto policy of India’s central bank.

The Algorand Foundation Expands Its Footprint in India

Blockchain protocol Algorand (ALGO) has expanded its footprint in India by securing new partnerships with NASSCOM, India’s trade body and chamber of commerce for the tech industry, T-Hub, a prominent innovation hub, and the Mann Deshi Foundation which supports India’s first rural bank for women.

Failure of Multi-Function Crypto Firms a Limited Threat to ‘Real Economy’: FSB

The FSB, which monitors financial systems and proposes rules to help prevent financial crises, said it was assessing the financial stability implications of multifunction crypto-asset intermediaries (MCIs) in July. MCIs are individual firms or groups of affiliated firms that combine a broad range of services, products and functions typically centered around the operation of a trading platform, according to the FSB. This could apply to numerous crypto heavyweights, like Coinbase or Binance.

TRM Labs Partners With Aussie Crypto Exchange Swyftx to Combat Scams

In 2022, Aussies reported a loss of AUD 221 million (USD 146 million) in cryptocurrency, an increase of 162.4% from the previous year, according to the announcement. This year, Swyftx has stopped AUD 3 million in customer funds from going to scammers.

Singapore Central Bank Rules to Discourage Crypto Speculation, Ease Investment Qualifications

“MAS has been very consistent about its stance against speculative retail trading, so it is unsurprising that they are largely moving ahead with their proposals,” said Angela Ang, a senior policy adviser for blockchain intelligence firm TRM Labs and a former MAS regulator. “That said, they’ve landed on slightly less restrictive measures in areas such as the inclusion of cryptocurrencies in determining customers’ net worth. This shows that MAS is listening, and is willing to consider industry feedback, even if they do not always agree.”

Genesis Sues Gemini To Recover ‘Preferential Transfers’ Worth $689M

Genesis and Gemini have been embattled in a public and legal feud ever since the collapse of FTX. Genesis filed for bankruptcy in January. Its parent company, Digital Currency Group (DCG), was sued by Gemini in July over allegations that DCG then described as “defamatory” and a “publicity stunt.” In September, Genesis sued its parent company, DCG, seeking the repayment of multiple loans worth over $600 million. And then, in October, Gemini sued Genesis over 60 million shares of the Grayscale Bitcoin Trust (GBTC), valued at around $1.6 billion. Gemini’s co-founders are the Winklevoss twins, Tyler & Cameron.

Celsius to Transition to Mining-Only NewCo After SEC Feedback in Updated Bankruptcy Plan

“In the coming weeks, the Debtors intend to file a motion with the Bankruptcy Court to approve modifications to the Plan to reflect the new Mining NewCo transaction,” the filing said. “The Debtors do not believe that these modifications will require resolicitation of the Plan. The Debtors still anticipate that distributions to creditors will commence in January of 2024.”

Mastercard Says Customers Are Too Comfortable With Today’s Money for Adoption of CBDCs: CNBC

The payments giant has a CBDC Partner Program that includes participants such as Ripple, Fireblocks and Consensys. The move was designed to encourage conversations among key players in the industry, but was seen as a way for Mastercard (MA) to deepen its involvement with CBDC developments as the number of nations exploring the technology grows. As many as 130 countries, representing 98% of global gross domestic product, are exploring a CBDC, according to the Atlantic Council. In May 2020, only 35 countries were considering one. Still, only 11 countries have so far introduced a digital currency.

Sam Bankman-Fried’s Trial May Be Over, but The Bahamas Is Living Its Own Trial

Nassau, The Bahamas — In early 2022, Ryan Austin was part of a non-profit foundation devoted to teaching people in The Bahamas how to code. One of the early donations it received was from FTX, Sam Bankman-Fried’s now-defunct cryptocurrency exchange that operated from the nation. The $30,000 contribution was made to train public school teachers in coding. About 90 teachers were shown how to teach public school kids to code during the summer in a kind of boot camp.

Austin went back to the FTX team with statistics reflecting the program’s success with a request: Let’s do this again.

“I think they were quite impressed and thought of using our data to boost their CSR Corporate Social Responsibility,” he told CoinDesk. FTX gave Austin and his team a pat on the back and the kind of goodbye that said, “We’ll be in touch.” That didn’t happen.

Instead, in November 2022, the FTX empire dramatically and rapidly collapsed into bankruptcy after a chain of events triggered by a CoinDesk report that raised questions about FTX’s financials. On Nov. 2, 2023, a jury found FTX founder Bankman-Fried guilty of seven counts of fraud and conspiracy tied to the exchange’s operation.

Many decisions that led to “one of the biggest financial frauds in American history” took place outside the U.S., in The Bahamas, where FTX’s leadership set up shop in 2021.

“There was a wave, an excitement about FTX in the air,” a nostalgic Austin told CoinDesk. “Businesses got a boost from their existence here. Employees were paid well and there was a lot of excitement around crypto and then suddenly, everyone was trying to figure out what the hell happened.”

Empty street in downtown Nassau, The Bahamas (Amitoj Singh/CoinDesk)
Empty street in downtown Nassau, The Bahamas (Amitoj Singh/CoinDesk)

In October 2023, as Bankman-Fried fought for his innocence in a Manhattan courthouse, downtown Nassau, the capital city of The Bahamas, appeared to be “a ghost town,” though that wasn’t entirely reflective of its economy.

“There’s no Bahamas without tourism. It’s the slow season. No cruise ship today. On Wednesday we had six (so it was different). Things pick back up around December,” said Mike Larry, a taxi driver. On days when cruise ships don’t arrive, shopkeepers often shut shops to enjoy a day off, in the “laid back” spirit of the Caribbean nation.

Economic activity, primarily tourism, has suffered in The Bahamas since the double whammy of Hurricane Dorian in 2019 and the COVID-19 pandemic, costing the nation a loss of $9.5 billion. Together with construction and manufacturing, tourism accounts for 60% of the developing nation’s GDP, which was $12.9 billion in 2022.

But when FTX made The Bahamas its base in September 2021, moving from the uncertainty of Hong Kong to the warmer shores of the archipelago, a funky cocktail of hope and skepticism hit the stands.

“If you came here last year everyone was talking about crypto. That ain’t make no sense,” said Larry as he drove through Nassau. “I don’t know about cryptocurrency. They say, ‘Put money you are willing to lose,’ but the only thing I am willing to lose is my girlfriend.”

CoinDesk spoke to more than a dozen locals to gauge their interest in cryptocurrency or FTX before its collapse. Around half of them said they had little knowledge about crypto or showed a lack of risk-taking appetite. But almost all of the individuals holding white-collar jobs who spoke to CoinDesk invested in crypto in some form or the other.

People waiting at a bus stand in the downtown area of Nassau, The Bahamas (Amitoj Singh/CoinDesk)
People waiting at a bus stand in the downtown area of Nassau, The Bahamas (Amitoj Singh/CoinDesk)

“People here don’t trust crypto because we love to feel the money,” said Mario Young, technology manager at ST Global Markets, a crypto broker registered in The Bahamas. “But FTX invested a lot in the economy, donating to schools and the main shelter. So it seemed legitimate, as the government seemed to be on board with everything.”

Young said he did not know much about FTX’s relationship with The Bahamas government, and he still doesn’t. But hints emerged during Bankman-Fried’s trial this past October.

While testifying, Bankman-Fried told prosecutor Danielle Sassoon he didn’t remember making an offer to pay off The Bahamas’ $11.6 billion national debt to the nation’s Prime Minister Philip Davis in 2021. The offer was made, according to Michael Lewis’ recent book about Bankman-Fried. Prosecutors also shared an email purportedly from Davis’ personal Gmail account, asking Bankman-Fried to speak to Davis’ son about a non-fungible token project the younger Davis was part of.

Larry claimed he knew “a lot of big people who are in government and they got what they needed from” Bankman-Fried, without providing evidence. “He bought $300 million worth of property, right? I didn’t even see him.” Nearly $300 million was spent on real estate, largely homes and vacation properties for senior staff, an FTX attorney told a Delaware court days after the bankruptcy was filed.

In October 2021, Davis cut a ribbon with Bankman-Fried to officially open the FTX office. A few months later, in April 2022, FTX broke ground on a $60 million headquarters in The Bahamas, which Davis said would rival Google’s headquarters. Construction never began, and the worksite remains abandoned in what looks like a mini-jungle fenced from all sides.

The Bahamas government or its Securities Commission did not return requests for an interview.

The site of FTX's planned headquarters (Amitoj Singh/CoinDesk)
The site of FTX’s planned headquarters (Amitoj Singh/CoinDesk) (CoinDesk)

Last month, Prime Minister Davis’ message at a pre-conference dinner was emblematic of the strategy the Bahamas had adopted: “no risk, no reward.” The next day, in his opening address at the conference, he expanded on it.

“Last night at dinner after my toast, I was reminded by a guest at my table that The Bahamas is a pioneer in the digital asset space, and history has proven that pioneers did not succeed without overcoming many obstacles or, as he put it, ‘without taking licks,'” Davis said without mentioning FTX.

(Disclaimer: The Bahamas government provided travel and accommodation for this reporter to attend this conference in the nation held on Oct. 12 and 13, but didn’t have any editorial control over this article.)

Bahamian Prime Minister Philip Davis making his toast at a pre-conference dinner. (Amitoj Singh/CoinDesk)
Bahamian Prime Minister Philip Davis making his toast at a pre-conference dinner. (Amitoj Singh/CoinDesk) (CoinDesk)

The Bahamas, living its own trial

Bankman-Fried’s trial may be over but The Bahamas appears to still be living through its own trial, hit by the stigma of rolling out a red carpet for FTX.

The local residents CoinDesk spoke to said they were not closely following Bankman-Fried’s trial, but they did question whether Bahamian authorities handled FTX and its unraveling appropriately.

On Nov. 9, 2022, FTX halted all crypto withdrawals. But one day later, it reopened withdrawals, supposedly only for Bahamian funds citing local regulatory requirements (prosecutors in the U.S. showed the jury an email from Bankman-Fried offering to do so).

A week later, the Bahamian regulator confirmed it had ordered contents of FTX’s crypto wallets to be transferred to government-controlled wallets to protect clients or their funds.

“I was in shock. I couldn’t believe it. Like seriously? They just shut down operations. Everyone was trying to withdraw money,” said Young.

It appeared that Bahamian regulators had managed to exert some control over FTX, forcing them to reopen withdrawals for Bahamians on Nov. 9, by freezing FTX assets and suspending its registration, a decision revealed on Nov. 10. The next day, FTX, a Bahamian entity, filed for bankruptcy protection in a U.S. court. On Nov. 13, Bahamian authorities opened a criminal investigation into FTX.

“It was a powerful event, especially for the financial sector,” Young said. “Everyone was just in disbelief because FTX was the next big thing, it bought up a bunch of property and they were spending a lot of money.”

Exactly one month later, after U.S. authorities filed criminal charges against Bankman-Fried, the Royal Bahamas Police Force arrested the FTX founder.

Cecil Wallace-Whitefield Centre, Office of the Prime Minister, Ministry of Finance, The Bahamas (CoinDesk/Amitoj Singh)
Cecil Wallace-Whitefield Centre, Office of the Prime Minister, Ministry of Finance, The Bahamas (CoinDesk/Amitoj Singh)

Young appeared to give the Bahamian authorities the benefit of the doubt while pointing to the news report that stated Bankman-Fried had offered to pay off the nation’s debt. “We just don’t know (about the involvement of the government), but now people will always associate Bahamas with FTX.”

Larry’s distrust for crypto and the government were in equal parts. “I didn’t have the time to do my own research and I don’t just go with what the government says.”

Austin believed the arrival of FTX and its collapse were both watershed moments.

“I had friends working in the space, people studying, excited about worthwhile careers,” he said. “Young people were investing, buying land and getting mortgages. The bringing up of young people happened as quickly as it did because of FTX. And its collapse is also a watershed moment because it highlighted so many of the issues with crypto, for the better.”

But he did have questions: “Who’s involved from the government? Why wasn’t there oversight? Was there oversight? Were they too close to the regulators? How does it impact us when they resume regulatory perspective?”

The Bahamas resumed regulatory updates five months after FTX’s collapse by stating a desire to tighten its crypto laws, but not before facing a barrage of hits to its credibility as an innovative pioneer in financial services – FTX’s new leadership responsible for restructuring called its Bahamas arm a “shell setup” to further Bankman-Fried’s fraud. It also accused Bahamian authorities of aiding Bankman-Fried’s attempts to escape justice and of directing unauthorized access to FTX’s systems in order to withdraw assets.

Since then, the nation has been fighting a crisis of confidence, a referendum on its credibility as a hub for financial services, which is the Caribbean nation’s second-largest industry after tourism, accounting for 15% of its GDP.

Its strategy seemingly borrows a page from Harry Potter, making FTX the equivalent of Lord Voldemort, adopting the strategy of not ever naming “He-Who-Must-Not-Be-Named” – FTX.

“I believe from a PR perspective, The Bahamas is doing a good job,” Austin said. “Just trying to stay out of it as much as possible, by not saying much and that’s what I think it is. We’re trying to navigate this without causing too much damage.”

Simultaneously, the government oversaw over 10 new companies registering in The Bahamas as a digital asset business over the past year and has promised new measures to its crypto regulatory framework, the Digital Assets and Registered Exchanges Act (DARE Act).

“DARE Act will include – among other things – measures to clarify the regulation of stablecoins, and the introduction of more robust investor and consumer protection mechanisms, including new provisions for a single framework for the registration and oversight of digital assets custodians and the provision of custodial wallet services and requirements for the segregation of assets,” Prime Minister Davis announced during last month’s conference.

The amendments are expected to be passed in Parliament by the end of the year, Davis said, and they also include a framework for the staking of clients’ digital assets and the operation or management of a staking pool as a business.

Albany, a residential complex where Sam Bankman-Fried lived in a penthouse with company insiders (Amitoj Singh/CoinDesk)
Albany, a residential complex where Sam Bankman-Fried lived in a penthouse with company insiders (Amitoj Singh/CoinDesk) (CoinDesk)

Digital assets and The Bahamas, here to stay?

A short stop at Nassau’s Margaritaville Beach Resort, a lounging haunt of Bankman-Fried, who was known as SBF, and the friends who turned on him, didn’t reveal any remnants of the FTX culture.

On the other side of the island from where Ernst & Young, Citibank and others have offices is where the luxury Albany complex where SBF and friends lived in a penthouse sits perched by the ocean. The gated community made tête-à-tête’s with SBF’s neighbors or sneak peeks nearly impossible.

As the sun set, a stunt biker rode by in an apparent rush to join a favorite weekend pastime of the locals. The next stop was Cocoplum, a restaurant Bankman-Fried and FTX used to good measure.

The road leading to Albany (Amitoj Singh/CoinDesk)
The road leading to Albany (Amitoj Singh/CoinDesk)

A waiter, who asked for anonymity as he was not allowed to speak publicly, told CoinDesk that Bankman-Fried had drawn other patrons’ eyes in the past.

“It was another guest who turned around and asked, ‘Do you know who that guy is?'” the waiter said. “He is very rich. Bankman-Fried looked like an ordinary Joe. I served him. Seemed nice. I wouldn’t say he did any big tipping. Our restaurant gets millionaires all the time.”

The waiter insisted that the restaurant wasn’t affected by the collapse of FTX, even though it supplied food to FTX’s cafeteria. “I don’t know about the nation’s economy, but as a restaurant, FTX’s collapse hasn’t affected us.”

Cocoplum, a restaurant frequented by Bankman-Fried and FTX employees in The Bahamas. 
Photo Courtesy: Amitoj Singh/CoinDesk
Date: October 2023
Cocoplum, a restaurant frequented by Bankman-Fried and FTX employees in The Bahamas (Amitoj Singh/CoinDesk) (CoinDesk)

Exact data showing FTX’s impact on The Bahamas doesn’t exist, but the nation’s GDP hints that it didn’t suffer as much as may have been expected from a company which once offered to pay off the entire nation’s national debt. GDP dropped from $13.06 billion in 2019 to $9.76 billion in 2020, but has been rising since. The GDP grew to $11.53 billion in 2021, $12.9 billion in 2022 and is projected to rise to $13.88 billion in 2023. This is in line with a study in February 2022 that said the Bahamian economy will return to pre-pandemic size in 2023.​

Still, the loss of the opportunity FTX promised and the damage as a result of the perceived red-carpet association with FTX remains incalculable.

“I believe we’re still OK because our finance industry is a strong financial product and people are coming here, investing and holding large accounts and family accounts every single day,” Austin said.

In fact, the nation’s leadership has resolved to regain credibility. At the conference, Prime Minister Davis said, “The Bahamas will continue to be a pioneer in the digital asset space” and touted the nation’s Sand Dollar as the world’s first central bank digital currency.

In the meantime, the shock of the downfall of FTX and SBF remains embedded in the psyche of a nation.

“We were surprised. We all knew bitcoin could be a shady business, but the guy was on the cover of Forbes, who would have thought,” the waiter said.

Edited by Nikhilesh De and Nick Baker.

Head of Dubai Crypto Regulator to Quit to ‘Pursue Other Interests’

Additionally, more than 12 crypto companies are set to be fined for not complying with guidelines by a Nov. 17 deadline, Bloomberg said, citing anonymous sources who asked not to be identified because the matter is private. The names of the firms were not mentioned, but don’t include Binance, OKX or ByBit and some others, which will be given more time to comply, according to the report. In its email, VARA did not comment on the fines.

U.S. Lawmakers Urge Treasury to Revise Proposed Crypto Tax Rules

The major sticking point is how the proposal captures hosted wallet providers, payment processors, some decentralized finance (DeFi) entities and others as “brokers” for tax reporting purposes. “The definition of ‘Broker’ remains too broad and would capture entities that do not possess traditional characteristics of a broker,” the letter said.

India’s Supreme Court Turns Away Petition Asking Government to Frame Crypto Guidelines

“Why should the Supreme Court look into this?” asked the bench, composed of Chief Justice of India D.Y. Chandrachud and Justices J.B. Pardiwala and Manoj Mishra, according to the Bar and Bench report. However, according to the order, India’s top court gave Wig the “liberty to move the appropriate court for the grant of regular bail” because the relief concerned is more in a “nature of a legislative direction.”

Australia Updates Its Capital Gains Tax Guidance to Include Wrapped Tokens and DeFi

“Being able to wrap tokens is a valuable and necessary cross-chain interoperability tool,” said Michael Bacina, Digital Assets lawyer at Piper Alderman Lawyers. “To have a purely technological function triggering a tax event and tax payable is not something users would expect when using crypto-assets.” Wins Digital Asset License in Dubai

The exchange will then get operational approval to provide “exchange services, broker-dealer services, management and investment services, and lending and borrowing services.” The Singapore-based exchange completed its licensing process in Singapore in June and has had regulatory victories in the Netherlands, U.K., France and Brazil. However, it has also suffered workforce cuts and difficulty maintaining fiat on-ramps during the recent banking crisis.

UBS Group’s Wealthy Clients Can Now Trade Some Crypto ETFs in Hong Kong: Bloomberg

In the past few days, Hong Kong has moved towards allowing retail investors to buy spot crypto Exchange Traded Funds (ETFs) and primary dealing of tokenization. The move appears to be another step in Hong Kong’s recently accelerated ambitions to become a virtual asset hub. It implemented a new regulatory regime in June, accepting applications for crypto trading platform licenses, and granted the first set in August, allowing exchanges to serve retail customers.

India’s Controversial Crypto Tax Should Be Cut After Failing to Achieve Aims, Think Tank Urges

The tax, a form of income tax known as TDS, has prompted as many as 5 million crypto traders to move their transactions offshore, and has cost the government a potential $420 million in revenue since it was introduced in July, 2022, according to the study by the Esya Centre.

Competition in Digital Markest Hits G7 Nations’ Radar

“Digital markets can present competition concerns,” the statement said. “Markets characterized by network effects, economies of scale, digital ecosystems, and accumulations of large amounts of data can be prone to increasing or creating barriers to entry, tipping, and dominance.”

India’s Central Bureau of Investigation Appoints Liminal to Manage Seized Digital Assets

“We consider our partnership with the CBI as a testament to our unwavering dedication to building a safe and regulated digital asset ecosystem in India,” said Manan Vora, Senior Vice President of Strategy and Business Operations at Liminal. “As experts in the field, we feel it’s our responsibility to assist law enforcement agencies with rigorous security protocols.”

Coinbase Adds Four National Security Experts to its Global Advisory Council

“With deep national security expertise, Esper, Murphy, Townsend, and Urban will help the Council examine what consequences will result from regulatory uncertainty for crypto in the United States, including the long-term economic and national security impacts,” Coinbase said.

Turkey in “Final Stage” of Bringing Crypto Legislation as Last Step to Get off FATF’s Grey List: Minister

Turkey is in the “final stage” of bringing crypto legislation to its parliament, a last step required for it to be removed from the Financial Action Task Force’s (FATF) “grey list.

‘Bruno Brock’, Founder of Oyster Pearl, Gets Four Year Jail Term for Tax Evasion

“I stated in public forums that after the ICO, the supply of PRL would not increase, and that the smart contract that created PRL would be “locked,” Elmaani admitted in the plea agreement, according to the announcement. “Contrary to these statements, on or about October 29, 2018, I used the smart contract to mint new PRL, without telling anyone, including others who worked on the Oyster Protocol project.”

Marshall Islands Further Strengthen’s Law That Made DAOs Legal Entities

In February 2022, the group of tiny islands, a close ally to the U.S., and geographically between Hawaii and Australia, became the first nation to recognize DAOs as legal entities. Since 2021, under the previous act, the Marshall Islands has incorporated almost 100 DAOs.