Another interesting angle to this is that the funds were collected in various different currencies, but all of them were converted into ETH. And they weren't converted carefully to make sure they got the full value, no attempt at OTC deals or anything; they were converted in a rush and dumped on the open market. This resulted in pretty clear loss of funds. It seems like a strange way for a government to operate.
That's not all: They also seized the funds with SBF's help after FTX had declared bankruptcy and SBF had stepped down as CEO. General counsel for FTX at the time indicated they were surprised by the fund movement and unaware of what was going on[1]. Shouldn't the Bahamas have been communicating with the people actually in charge of FTX at the time? Aren't those the people who would legally be in control of the funds?
I agree with your last paragraph, but the prior makes total sense. The government aren't crypto experts nor were they trying to min-max their incoming half a billion. They wanted it quick and easy.
I would expect a government to hold it as seized until they brought in both crypto experts and legal experts to help them determine what to do with it, probably via the judicial system. When Japan seized BTC from Mt Gox it was years before they converted it to Yen. The same goes for BTC seized by the US government in cases like Silk Road. The Bahamas didn't even convert it to the Bahamian dollar or USD. They converted to ETH. (Likely SBF did it for them.)
Nothing to do with crypto and more with the fact FTX corporate struture is such a mess, and account owbership close to impossible to identify. Based on that, authorities on the Bahamas, which hold jusrisdiction over at least part of FTX, did their thing by getting a person, that might or might not have been in a position of authority, to comply with a legal court order.
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All in all, nothing to see here. And in case the confiscated assets cannot be confiscated by the Bahamas a court will ultimately return them.
Yes, however, governments do on occasion hire experts in various fields. During my last conference the discussion was exactly on how you can't just drop millions of BTC/ETH w/e into the market without effectively hurting the price. It is not like they were trying to be nice to the markets. The money just had to be split between several cooperating agencies so there was a reason to maximize return in USD.
I'm not defending their action, but there is a question of (a) authority and (b) capability. You're asking about authority, and yes SBF has stepped down, but the Bahamian regulator may have undertaken this on its own authority (possibly also with a judicial warrant, to perfect the authority), and so all they were lacking at that point was capability, which SBF could provide. It's sort of like if a criminal has a key to a shed with stolen goods in it -- we all agree the criminal does not legally own the goods, but he has the key, so you compel him to open it up.
That's not all: They also seized the funds with SBF's help after FTX had declared bankruptcy and SBF had stepped down as CEO. General counsel for FTX at the time indicated they were surprised by the fund movement and unaware of what was going on[1]. Shouldn't the Bahamas have been communicating with the people actually in charge of FTX at the time? Aren't those the people who would legally be in control of the funds?
[1] https://twitter.com/_Ryne_Miller/status/1591281729125613570
/tinfoil