After FTX went bankrupt, the Bahamas suspended its license and took control of its digital assets.
But the island-nation has fired back at accusations that its regulations aren't up to scratch.
The Bahamas attorney general accused the FTX CEO of "inaccurate allegations" in his court filings.
The collapse of Bahamas-based FTX has prompted the island-nation to defend its crypto laws and criticize the FTX's new CEO, John J. Ray III.
After the crypto exchange founded by Sam Bankman-Fried entered bankruptcy earlier in November, the Bahamas suspended FTX's license and took control of its digital assets by transferring them into a government crypto wallet.
In a video statement on Sunday, the Bahamas attorney general, Ryan Pinder, took aim at Ray over bankruptcy court filings relating to the country's actions against FTX.
Pinder said it was "extremely regrettable" that Ray had "misrepresented the timely action" of Bahamian regulators, and accused him of filing "inaccurate allegations."
He added that the Bahamas securities commission "deserves the highest praise for moving so swiftly and decisively" in its liquidation proceedings against FTX.
Ray is also known for acting as CEO for energy giant Enron, and handled its liquidation after accounting fraud. On taking control of FTX, he said: "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."
Pinder hit back at accusations that the Bahamas was failing to properly regulate cryptocurrency amid the FTX fallout. He said: "The world is full of countries in which there is no legislative or regulatory authority over the crypto and digital asset business, but I must say the Bahamas is not one of these countries."
The Caribbean nation has established itself as a crypto hub despite having a population of just 400,000. Bankman-Fried previously told Blockworks that FTX moved there because of "the proactive stance taken by The Bahamas and its regulatory bodies on cryptocurrencies."
The Bahamas is also home to Deltec Bank, which in 2021 was reported by Bloomberg to hold $15 billion in reserves for Tether, a stablecoin pegged to the US dollar.
Pinder also suggested that FTX's legal strategy and "intemperate statements" could be being driven by "the prospect of multimillion dollar legal and consultant fees."
"In any case, we urge prudence and accuracy in all future filings," he added.
FTX's bankruptcy has led to calls for tighter crypto regulations from both US senators and the Bank of England.
One FTX lawyer previously said the company had spent almost $300 million on luxury houses for senior executives in the Bahamas, while Fox Business reported that Bankman-Fried often bought $2,500 lunches at one bistro.