Why Crypto Companies Are Choosing the Bahamas to Set Up Shop
FTX has cemented its ties with the Bahamas, breaking ground on new headquarters in Nassau
FTX’s Sam Bankman-Fried | Blockworks exclusive art by axel rangel
key takeaways
- FTX cited friendlier regulations and looser Covid-19 restrictions as reasons for its move from Hong Kong to the Bahamas
- The island nation has pushed the pace for the development of sophisticated digital asset regulatory frameworks as it eyes large crypto businesses
Cryptocurrency exchange FTX has cemented its relationship with the Bahamas, having broken ground Monday on its new headquarters in the country’s capital.
Announced partly by FTX’s co-CEO, Ryan Salame, the move could serve as a bellwether for similar crypto companies looking to take advantage of the island country’s favorable tax and regulatory frameworks.
Founded by billionaire Sam Bankman-Fried, FTX is incorporated in the neighboring island nation of Antigua and Barbuda, while its new headquarters will be based in the Bahamas’ capital of Nassau.
The company plans to construct a campus at the same location, estimated to cost up to $60 million, with the intent of housing 1,000 employees, according to local news outlet The Nassau Guardian.
The complex will feature a boutique hotel with 34 rooms, as well as commercial space.
Last year, the crypto derivatives marketplace made the decision to relocate from Hong Kong to bluer waters, citing friendlier regulations and no mandatory Covid-19 quarantine upon arrival.
Coupled with its “draconian” pandemic measures, the special administrative region’s bout and subsequent failure to maintain its democratic government has led international companies to reconsider their future in Hong Kong — jurisdictions including Singapore and the Bahamas appear sanguine, according to some.
“The proactive stance taken by The Bahamas and its regulatory bodies on cryptocurrencies” was a primary motivator for the move, Bankman-Fried told Blockworks in a September email.
Paradise found
Joining FTX’s Bankman-Fried at the ceremony, Bahamian Prime Minister Philip Davis said the exchange left “positive footprints” throughout the country.
“Today, they continue to make positive impressions with the groundbreaking of their new headquarters,” Davis tweeted.
FTX’s announcement follows the Davis administration’s rollout of a policy white paper on “The Future of Digital Assets in The Bahamas.”
The paper details the island nation’s four-year vision to transform the country into a “leading digital asset hub” in the Caribbean and to position itself as a global leader in the “progressive regulation” of crypto businesses.
Policy objectives set forth therein include intentions to expand the scope of current legislative frameworks, encourage innovation and develop skills to fill crypto-friendly jobs in high demand.
Developing necessary skills will rely on the government’s partnerships with the University of The Bahamas, the Bahamas Technical and Vocational Institute, FTX and other financial institutions, according to a Tuesday press release.
The paper also lays out plans to expand the resources of the Securities Commission of The Bahamas to bolster its role as the main crypto regulator.
Following FTX’s ceremony, Davis said he was expecting to meet with another “digital crypto giant” immediately after, The Nassau Guardian reported. It is not yet known which company the prime minister was referring to.
“As our country becomes the vanguard in digital assets around the Caribbean and the world, the policy that we put in place now can significantly generate a much needed economic recovery and change the landscape of the Bahamian financial markets as we know it,” Davis said.
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