A new loophole has emerged for increasingly desperate FTX users looking to withdraw funds stranded on the exchange.

In a tweet on Thursday, FTX said it would facilitate withdrawals of Bahamian funds as per regulations in the country. Although only accounts KYC compliant accounts registered in the Bahamas were eligible to make withdrawals, the option presented an opportunity for some traders looking to get their funds out of FTX at any cost. 

On-chain analysts began noticing a number of sizeable withdrawals from FTX over the span of a few hours. Data from Lookonchain showed that $23.7 million USDT was withdrawn over a five-hour time period on Thursday, with eight addresses withdrawing over $1 million each.

“These smart whales took advantage of the Bahamas loophole to withdraw their FTCX through a KYC account in the Bahamas,” tweeted Lookonchain 

Before long, the term “Bahamas loophole” was making rounds on Twitter amid reports that some users were paying for KYC accounts in the Bahamas and then bribing FTX employees to process them. 

One theory as to how the Bahamas account was bypassing the internal balance transfers block was that the account created an NFT that the user looking to cash out buys with his or her entire balance. Data from utxo.club shared by Cobie on Twitter, which documented around $5 million worth of NFT sales on one particular NFT on FTX, backed up these speculations.

Included in the list of people offering to buy Bahamas KYC accounts was Avraham Eisenberg, the Mango Markets exploiter, who declared his DMs open for those interested in a tweet earlier today.

“I’m not a lawyer, but don’t do this. No amount of $ is worth the likely consequence that will come with abusing the Bahamas loophole,” tweeted crypto trader Altcoin Psycho.

The stakes are high for those moving funds through this avenue and will likely come with legal ramifications. Still, some users found using the Bahamas loophole to be justifiable, even if it comes at the cost of being implicit in financial crime.

“tbh i dont think you can be mad at the ppl exploiting the loopholes that are available to be exploited,” tweeted crypto trader Degen Spartan.