Crypto

FTX And The Crypto Industry Set Up Base In Bahamas: 5 Things To Know


FTX, the crypto exchange that made its 30-year-old founder and CEO, Sam Bankman-Fried, one of the world’s richest people, moved its headquarters in 2021 from Hong Kong to the Bahamas — the Caribbean island nation credited with having one of the world’s first comprehensive crypto regulatory authorities.

FTX raised $400 million in January at a $32 billion valuation. With a Forbes net worth of $24 billion, Bankman-Fried said he wants FTX to become “biggest source of financial transactions in the world.”

FTX announced plans in September 2021 to establish a substantial presence in the Bahamas as part of FTX’s global expansion.

The Moguldom Nation spoke to some FTX Bahamas employees about what it’s like to work there.

Here are five things that are known so far:

1. Planned new $50M FTX campus in Nassau will house 1,000 people

FTX Digital Markets, the Bahamian subsidiary of FTX, expects to break ground on a new $50 million-to-$60 million campus in the “next couple of months” and build out the 1,000-person facility over the next two to three years, the Nassau Guardian reported on Jan. 17.

The FTX Bahamas campus will be comparable to that of Apple or Google, according to Ryan Salame, co-CEO of FTX Digital Markets.

“The headquarters is going to be an innovative space for all our community and for Bahamians to experience our culture and world cultures,” said Valdez K. Russell, a Bahamian FTX employee working in communications, in an interview with The Moguldom Nation.

Russell has been integral in opening the FTX Bahamas office and in creating connections within the local community. 

The FTX Bahamas campus will be located next to Pictet Bank, a wealth management service company on Blake Road and West Bay Street in Nassau, according to Salame.

Meanwhile, FTX has set up offices in the Veridian Corporate Center, a luxury office complex in Nassau.

FTX Holdings Ltd., the real estate holding company for FTX Digital Markets, sought approval to develop close to five acres of land at Bayside Executive Park, according to a March 2022 town planning meeting in Nassau. The new development will include the company headquarters, a boutique 38-room hotel and a building for commercial use. 

The FTX development will include commercial community work spaces “that are going to be relevant today,” Russell said. “Incubator spaces are also a consideration — environments that bring toegther some of the sharpest minds, to perhaps even invite them to be a part of our team, igniting some of the best ideas so we can refresh our comitment for a better world from the Bahamas.”

2. FTX is hiring local Bahamians

Since opening its headquarters in the Bahamas in September 2021, FTX has hired at least 40 Bahamians who work in areas of finance, marketing, and software development.

In addition, 50 FTX employees asked to transfer to the Bahamas, a spokesperson told Blockworks

“We position ourselves to be the cypto capital of the world, where people like us have opportunities,” Russell told The Moguldom Nation. “As we expand, we can contribute right from the Bahamas. It will create meaningful opportunities for young talented Bahamians to contribute in meaningfull ways — an opportunity to give back and invest in their country — they’re making sigificant contributions at home.”

Jessica Murray, the chief compliance officer for FTX Bahamas, has a team of 12 — all locals who were domiciled in the Bahamas or who came back home to the Bahamas work at the new FTX headquarters.

“We have quite a number of brilliant minds contributing,” Murray told The Moguldom Nation. Compliance officers are the “police officers on campus,” she said, in charge of KYC (Know Your Customer) regulatory compliance, sanctions, transaction monitoring, market surveillance, and keeping the company in good standing.

“It’s a pretty good place to work, a lot of moving parts,” Murray said. “It’s exciting to be on the forefront of crypto.”

The new FTX Bahamas headquarters will be a hub for innovation and training for Bahamians and international talent, CEO Salame said. “FTX is extremely excited for what is to come for both the industry and The Bahamas. We are reinvesting and contributing a significant amount to the growth of our team here in The Bahamas. With this project, we will create even more local jobs on top of the 40 jobs we have created.”

FTX launched its U.S. affiliate, FTX US, in 2020 with Chicago as its U.S. headquarters and employees in Miami, San Francisco, New York and other cities. It has about 75 total employees, Business Journals reported in February, 2022.

In the U.S., FTX’s approach to hiring has been slow, deliberate and selective, hiring employees from major trading firms and hedge funds, and tech giants like Google and Amazon. Employees are flocking to the crypto industry from traditional finance and tech firms, according to FTX US President Brett Harrison.

“Crypto is the ultimate brain drain right now,” Harrison told Chicago Inno., an affiliate of the Business Journal family.

3. Regulatory framework

FTX operates in the Bahamas as a digital assets business regulated by the country’s Digital Asset Registered Exchanges Bill (DARE Act), which allows for licensing of cryptocurrencies and other fintech companies. DARE establishes a full regulatory framework for digital asset activities, provides opportunities for digital asset businesses and will allow FTX to expand its platform in a compliant manner, FTX said in a press release.

Other companies are doing business in the Bahamas under the DARE Act, including Delchain, a digital asset financial institution.

The DARE Act is “a game-changer and is poised to attract global innovators and entrepreneurs in fintech to The Bahamas, as they look to enjoy the credibility of being licensed under a comprehensive regulatory regime,” said Bruno Macchialli, CEO of Delchain, in a Jan. 19 prepared statement.

4. Why did FTX choose Bahamas?

FTX is helping raise the profile of the Bahamas as a friendly environment for cryptocurrency businesses to set up. The Bahamas has been a pioneer in embracing Bitcoin firms and in 2021, launched one of the world’s first central bank-issued digital currencies, the sand dollar. Bahamas-based Deltec Bank provides services to FTX, tether, and other crypto exchanges.

When China’s central bank banned all virtual currency-related transactions and activity in 2021 to focus on developing its digital yuan, regulators throughout the world started focusing more attention on crypto.

Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?

FTX chose the Bahamas based on 21 criteria, Salame said. “We essentially put every country up on a board. We went through a list of criteria that we were looking for to move the headquarters of FTX there.”

The regulatory environment was No. 1 on the list. “We wanted a real regulatory environment, not a place to hide away. And so The Bahamas was a contender on that front,” he said.

“Then we looked at quality of living, location, quality of government, these different aspects and throughout the whole list… The Bahamas came out on top.”

The absence of strict covid quarantine rules also helped make the Bahamas stand out. “It’s important for me to be in a place where I can get in and out without weeks spent in hotels for meetings and conferences,” Bankman-Fried told Forkast.News.

5. Sam Bankman-Fried’s style of philanthropy

In an April 3, 2022 interview, Bankman-Fried told Bloomberg that he plans to keep about $100,000 or 1 percent of his annual earnings and donate the rest. “You pretty quickly run out of really effective ways to make yourself happier by spending money,” Bankman-Fried said. “I don’t want a yacht.” 

Bankman-Fried “lives like a college student perpetually cramming for finals,” drives a Toyota Corolla, and sleeps on a beanbag in the luxury apartment he shares in Nassau with nearly a dozen roommates, Zeke Faux wrote for Bloomberg.

In the Bahamas, FTX’s Valdez said that Bankman Fried has made commitments around effective altruism.

“We have a commitment to health and wellness, to climate change and selective community outreach,” Valdez said. “We are commited to animal welfare and empowerment of women.”

Photos: Sam Bank-Fried (Tom Williams/CQ Roll Call via AP Images) / Bahamas by Fernando Jorge on Unsplash, https://unsplash.com/@fx24?utm_source=unsplash&utm_medium=referral&utm_content=creditCopyText



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