FTX and other crypto exchanges find paradise in the Bahamas, Caribbean

Earlier this week, crypto exchange FTX announced that it would move its corporate headquarters to the Bahamas from Hong Kong. FTX CEO Sam Bankman-Fried said it would be the company’s “first kind of official headquarters”.

Bankman-Fried identified two main reasons driving the move to the Bahamas, a comprehensive crypto regulation and the absence of strict quarantine rules that allow for easier travel. FTX is a regulated entity in the Bahamas, registered under the Registered Exchanges and Digital Assets Act 2020. FTX already has 15 employees in the Bahamas and is planning to recruit more local employees for key roles in finance, marketing, and software development. Currently, the Bahamas and Gibraltar are the only two countries that regulate crypto derivatives, Bankman-Fried said. So, since clear, easy-to-follow crypto regulations are rare, so are the options for crypto businesses to establish their base.

There is another benefit to moving to the Bahamas in the Caribbean: The Bahamas is a tax haven as citizens do not have to pay taxes on income, capital gains, or wealth and so do the companies that operate there. Thus, FTX moving its facility to the Bahamas means it will save a significant portion of its taxable income in Hong Kong. And if any employees from Hong Kong move to the Bahamas to work, they will also save tax because Hong Kong residents are exempt from income tax if they work abroad for 12 months or more.

In October last year, the Bahamas became the first country to launch a nationwide central bank digital currency, the Sand Dollar. Almost all the local businesses in the archipelago used Sand Dollar. The country also has Bitcoin ATMs concentrated in the North, Central, and Eastern Bahamian islands, cleverly placed in cinemas, cafes, and other frequently visited locations. The Caribbean has strategic, regulatory, and tax advantages for crypto businesses like paradise.