Antigua and Barbuda Perpetual Regulatory Disaster and FTX Collapse

By Kwame Nkosi Romeo

Where are the notorious speechifying Antigua and Barbuda Ambassador to the US, Ronald Michael Sanders, and prime minister Gaston Browne's commentary on FTX Trading?

None exist. None of the two criticized Samuel Bankman-Fried's (SBF) CEO, the sole owner of FTX Trading Ltd and Emergent Fidelity Technologies (EFT), both bankrupt companies affiliated under Antigua and Barbuda Incorporated Business Corporation (IBC) # 17182 and 17532 on April 02, 2019, and April 22, 2022, respectively. 

Indeed this bureautic tradition of the Antigua Labor Party's (ALP) regime revolving door politics continues under ALP prime minister Gaston Browne and infamous political rogue Ambassador to the US Ronald Michael Sanders. 

In testimony before the Houses Financial Service Committee on December 13, 2022, John J. Ray III, CEO of FTX Debtors, publicized: "..Chapter 11 was the best course available to preserve any remaining value in the FTX Group, which was in deep financial distress. My first act as CEO was to authorize the Chapter 11 filings of over 100 FTX entities."

Another FTX corporation, Almeda Research hedge fund, was managed by Caroline Ellisson, the former CEO. With SBF and FTX co-founder former Chief of Technology Officer Gary Wang embezzled billions of FTX funds. This activity was concealed from investors and consented to by SBF and Wang, leaving FTX investors empty-handed and debt-ridden. Some of these funds were handed over to EFT to be invested in Robin Hood on May 13, 2022, valued at US$648,293,886 (m) million. EFT's stake in Robinhood is now worth $447 million, a -31.05%.

As well as that, Ray III reasoned the revelation of nearly $2.2 billion in assets versus liabilities amounting to $10 billion pushes the total debt-to-assets ratio at 4.5454% or 454.50%, and it is alleged these funds lead to the ALP government and an offshore bank. 

Inevitability Bahamas regulator, the Securities Commission of the Bahamas, says 

"it seized $3.5 billion worth of cryptocurrency from collapsed crypto exchange FTX." This amount, added to Ray III's findings, amounts to $5.7 billion. Presumably, FTX assets are slowly increasing.

Contrastingly, a significant financial failure resulted from the ALP government's faulty regulation and ineffective Financial Service Regulatory Commission (FSRC) dating back to R. Allen Stanford's $9 billion Ponzi scheme. 

These deliberate failures corroborate ALP's negligence and irresponsibility. Therefore fundamental change is necessary for immediate legislative reform of the Antigua and Barbuda government's rotten IBC and booting out of the ALP government since both are valueless.

FTX's losses amount is similar to R. Allen Stanford's failure. SBF FTX Ventures and Alameda Research overextended to 37 regions, 100 corporate entities, and 300 employees. 

In the end, SBF was arrested, indicted, and ultimately bailed. SBF's $250 million bond allegedly lowered to $4 million or 1.6% of the original amount!

The nexus of FTX and Alameda Research was more evident before the bankruptcy of FTX.US. Arkhan Intelligence confirmed Alameda Research, FTX's sister company based in Hong Kong, was involved in withdrawing $204 million from West Shires Service Inc, doing business as FTX US.

-Alameda Research withdrew $204M ahead of bankruptcy filing: Arkhan Intelligence, Ana Paul Pereira November 26, 2022.

Preceding this news was the bankruptcy of Three Arrow Capital (3AC) which defaulted on a $670 m loan provided by Voyager Digital and failed to pay $270m to the crypto exchange Blockchain. Such borrowing compounded 3AC debt to $3.5 billion, with 67.43% or $2.36 billion owed to Genesis Global Trading. (Bankrupt Three Arrows Capital Owes $3.5B to Creditors Including $2.5B to Genesis by Kate Irwin July 19, 2022)

According to court documents filed by liquidators on Friday, August 8, 2022, Su Zhu and Kyle Davies, founders of 3AC, vanished amid looming bankruptcy. That business collapse brought about the domino insolvency of two significant lenders in the industry, Celsius Network, and Voyager Digital. In these crises, FTX saw business opportunities and bought the assets of Voyager Digital for $1.4 billion. However, investors were unaware that the FTX exchange owes about $1.45 billion to its top 10 creditors. FTX's debts to its 50 biggest creditors are nearly US$3.1 billion, culminating in the bankruptcy filing of FTX on Tuesday, November 23, bringing to light over a million financially distressed exchange customers and the highlightings of the biggest centralized cryptocurrency exchange fraud implosions.

In retrospect, many known cryptocurrency investors, those knowledgeable in finance and government leaders, deserved censure. Still, the shocker, Bankman-Fried, was a primary borrower from the crypto named above lenders. Added to this growing list was BlockFi, another bankrupt crypto lender, making murkier sequences much worse for SBF. Physics of the FTX Bubble: Hot Air Rises Fastest - by PYMNTS November 24, 2022.

Is the ALP planning a forfeiture of EFT funds as was the case with former Ukraine prime minister Pavel Ivanovich Lazarenko US$76 million?

Browne would never take that chance with John J. Ray III, CEO of FTX Debtors. EFT borrowed funds from BlockFi cryptocurrency lender is now a source of contention. BlockFi has since sued EFT, a guarantor of the Almeda Research loan, for reneging on its obligation under a November 9 pledge collateral of Robin Hood shares. The BlockFi complaint aims "to enforce the terms of a pledge agreement and to recover collateral that is property of these bankruptcy estates."

-United States Bankruptcy Court For The District Of New York - BlockFi Inc. et al. v. Emergent Technologies Ltd. et al.; Complaint ('Collateral Recovery') Offshore Alert November 28, 2022.

Not only that! Prime minister Browne alluded that FTX was operating without a trading license was fallacious; since Emergent Fidelity Technologies, an FTX affiliate was registered under Antigua IBC. Less than a month later, EFT invested in Robin Hood on May 13, 2022, valued at US$648,293,886 (m) million.  

According to EFT US Security Exchange Commission filing on May 2, 2022, Form SC 13D Emergent Fidelity Technologies Ltd - Form SC 13D - Robinhood Markets, Inc. (0001783879) (Subject) asserts: The principal business of Emergent is making investments in securities and other assets. 

The only restriction regarding Emergent Fidelity Technologies Ltd trading and commercial activities stipulated by the twin-island state IBC lax legislation is trading cannot occur within Antigua and Barbuda borders. Despite that, International investments and Global retail trading is allowed. 

Appallingly, prime minister Browne presupposes that EFT "... had no trading license to do any business in Antigua. That license was never granted even though an application was made." That immediate comment was a tactical plan to deflect the ALP government's imminent misconduct and failure of fiduciary responsibility while constantly pursuing scapegoats to apportion blame and gain the upper hand prompting a fall guy to come forward.

Both go hand in hand with benefits in kind. So too, was Antigua Labor Party (ALP) prime minister Gaston Browne's doubtful warning about the prudence of Antigua and Barbuda regulators a case of self-preservation. Meanwhile, leaving legal luminary and Ambassador Arthur Thomas, chairman of the East Caribbean Securities Regulatory Commission (ESCSRC) and chairman of the government-owned Caribbean Union Bank (CUB), in the entanglement, setting free other scheming conspirators while at the same time offering Thomas the final stabbing advice;

".. that perhaps as chairman of the ECSRC that he should not have taken such a decision" 

Again alternative hypothesis proves prime minister Browne wrong: Why did the FSRC not cancel the IBC registration for FTX and EFT due to a Lack of understanding of the business model? A scathing criticism is registering companies without knowing the business model.

 (Lack of understanding of the business model' saved A&B from damages of FTX fallout. November 23, 2022, Elesha George.

On the other hand, in the lead-up to that same urging, Browne traveled to the Bahamas twice to meet FTX CEO Samuel Banker-Fried; according to sources knowledgeable of the situation, Thomas did not! In the same manner, Browne's subsequent defense of Bankman-Fried is discouraging.

What was the role of the Caribbean Union Bank (CUB) in these shenanigans?

Imagine a bank that never recorded a profit since 2005 and lost as much as $3 million in a calendar year magically turning a $4 million payoff is suspicious. Upon government advice, Ambassador Arthur Thomas oversees Antigua and Barbuda's 80% interest that supposedly linked the bank to FTX Trading activity and the political cabal interest. 

-PM lists CUB as one of the government's 'superior' investments - by Carl Joseph -Antigua Observer -March 6, 2020.

Why did neither the Antigua Labor Party (ALP) government nor the FSRC not turn to the USEC Freedom Of Information Act (FOIA) to verify FTX and research CUB? 

(State of the Nation Address by prime minister Gaston Browne on January 1, 2018)

It is clear the FSRC` did not learn anything from the Stanford billion-dollar Ponzi scheme and the consequences of those collapses to investors; 14 years later, FTX is another terrible black eye for Antigua and Barbuda. 

Fourteen years after the collapse of Stanford Intl Bank, another business entity shrouded in the mystery of non-transparency and accountability is now exposed but protected by the weak laws of Antigua and Barbuda IBC. EFT is an offshore company incorporated in Antigua, and Barbuda caught in a web of corruption.

The Digital Asset Business Bill 2020' was passed' by the Antigua and Barbuda House of Representatives on May 27, 2020, 'to protect both exchanges and their customers.' but failed to do so. In brief, poor leadership, lack of transparency, and a vision without accountability produce robber-baron tendencies. 

Just as the Antigua and Barbuda 1981 Independence Constitution that Colonial Britain passed on to the ALP government, so too is ALP subservience to monied interest to direct the future destiny of the twin-island state. It's a categorical imperative that this generation appropriately demolishes this historical wrong to the dustbin of history.

The same as Robert Alan Stanford cunningly crafted Antigua and Barbuda offshore bank legislation. Similarly, a significant crypto influencer, ALP benefactor, and Economic Envoy for Technology, Calvin Ayre, pioneered the nation's cryptocurrency Digital Asset Bill 2020 with a local trusted legal luminary closely connected to the ALP.

ALP-Stanford collusion was cited as 'Stanford's deep involvement in Antigua's financial regulatory sector undermined its ability to prevent his fraudulent activity.' Today that cost of corruption still haunts Antigua and Barbuda, prompting Nobel Prize Laureate economist Paul Krugman to declare in New York Times op-ed piece on December 19: Why Petulant Oligarchs Rule Our World and communicating we are living in an era of 'petulant oligarchs'

(-Regulatory Effectiveness & Offshore Financial Centers - Andrew P Morriss page 435 19/51)

Many of these instances involve Antigua and Barbuda, and as Bob Marley expresses in Redemption Song:

"Emancipate yourself from mental slavery 

None but ourselves can free our minds."

This emancipation is elusive in this gangster paradise. The politically well-connected are like leeches sucking the economy's lifeblood, such as the Antigua Labor Party (ALP) and some associates of the merchant class. The people's only course of action Ah Fu Get Rid Ah Dem political bandits.

The upcoming election on January 18, 2023, is the beginning but not the conclusion of the struggle for better governance! People must rise and defend people's power to revolutionize and diversify the economy and end the elite political plunder of the public treasury! 

Rise, brave Antiguans, and Barbudans strive for excellence. Let the New Year ring in our commitment to true liberation, abolishing the on-your-knees system of subservience. 

Vote dem out!