Although the survival of the Innovation Hub is not contingent on FTX funding, Rees says the collaboration promised to take the scheme “to another level,” providing a leg up to founders from the Caribbean.
Worse, Rees explains, the collapse of FTX created an employment vacuum that deprived Bahamians of both their current jobs and potential career opportunities. “The saddest part for us, outside the millions of people that lost money,” he says, “is that some of our countrymen would have received the job of a lifetime, but it was pulled out from under them.”
Although groups of crypto enthusiasts already existed, the Bahamas began to formally establish itself as a crypto hub in late 2020 with the passing of the Digital Assets and Registered Exchanges (DARE) Act.
At the time, it was among the only pieces of fully-fledged crypto legislation worldwide, says Caroline Malcolm, head of international public policy at blockchain data firm Chainalysis. It established a clear set of rules for crypto companies, unavailable in most other jurisdictions, and ensured businesses that engaged in malpractice could be held to account.
In the two years since, a collection of startups and large crypto companies have set up shop in the Bahamas, among them FTX and OKX, another large crypto exchange. Separately, Tether, whose dollar-pegged stablecoin is central to the smooth operation of crypto markets, holds its reserves with a Bahamian bank, Deltec Bank & Trust.
But already, signs of damage dealt by the FTX collapse to the Bahamas’ status as an emerging crypto capital are beginning to show.
In December, SALT, the events company led by former White House communications director Anthony Scaramucci, announced the cancellation of Crypto Bahamas 2023. Another event, D3 Bahamas, run by the Bahamas government and billed as the country’s “flagship Web3 and financial technology festival,” was due to take place this January, but has been postponed. A new date has not yet been set.
Carlyle Bethel, founder of real estate tokenization startup Akerage, was due to pitch for venture capital funding at D3 and describes the postponement as “disheartening.” His chief concern is that the FTX collapse has “shaken potential investors,” making it more difficult for startups like his to bring onboard the funding they need to scale.
As for other global crypto businesses with ties to the Bahamas, the response has been mixed. Tether is unmoved; Paolo Ardoino, CTO, says the FTX situation is in no way a reflection of the Bahamas and that Tether is “strongly considering” opening an office there. OKX, however, declined to answer questions about its commitment to the country.
Nassau is also home to a growing brigade of crypto startups, like oceanfront coworking space Crypto Isle, which aims to bring together isolated groups of entrepreneurs and “create a space for people to learn about crypto,” says cofounder Davinia Bain.
Other startups work alongside the Caribbean Blockchain Alliance, an NGO that advocates for the adoption of blockchain technology in the region. Stefen Deleveaux, president of the organization, describes the crypto scene in the Bahamas as “small, but active and growing.”
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