The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Deltec Bank & Trust’s chairman yesterday said his response to Sam Bankman-Fried would be “why in the world” if the embattled FTX founder were to ever contact him.

Jean Chalopin, speaking at the D3 digital assets conference staged by the Government and Securities Commission, told attendees that FTX’s collapse in November 2022 was similar to the “pain and adjustment” that all infant, emerging industries must go through as part of their natural evolution.

The creator of the Inspector Gadget cartoons, and his Lyford Cay-based financial institution, have vehemently denied allegations levied in multiple US-based class action lawsuits that they knowingly aided and abetted the multi-billion dollar FTX fraud prior to the crypto exchange’s failure.

Asked about the FTX situation, and its impact on the wider digital assets industry, Mr Chalopin responded: “I think in anything new you have times of pain and adjustment. Pain happened. Remember the dot.com [bubble that burst at the turn of the 21st century]? I’m sure that the people who are 150 years-old, although there are not too many of them today, remember the first car, the first plane.”

Citing the latter as examples of innovation that took some time to perfect, and become what they are now, the Deltec chief added: “Anything new goes through a period of pain and adjustment, and if it’s not good it gets discarded very quickly and if it’s good, it’s going through a period of adjustment..... What happened is part of the process.”

Deltec Bank & Trust has consistently asserted that neither itself nor Mr Chalopin had any knowledge of wrongdoing by Sam Bankman-Fried and his inner FTX circle as they pledged to “vigorously defend... the unfounded allegations” in the latest class action lawsuit filed against them by the crypto exchange’s aggrieved investors and clients.

“Deltec Bank and Jean Chalopin had no knowledge of wrongdoing by FTX or its executives until the numerous public revelations in late 2022,” the Bahamian institution said in a previous statement responding to Tribune Business inquiries. “Deltec Bank and Jean plan to continue to vigorously defend against the unfounded allegations..... and look forward to their forthcoming motions to dismiss this case.”

Mr Chalopin yesterday also sought to put an end to suggestions that Deltec is a so-called “crypto bank”. He added: “One of the misconceptions is that we’re a crypto bank. What that means is that we’re a bank engaged in crypto. We don’t. We’re a financial institution like any bank in the world.

“We are engaged in supporting innovation. That means in the crypto field, blockchain, everything around that we support....Are we perfect today? We come from a history of private banking, which is different from what we have today. Today, we are a corporate bank and a private bank working within a new paradigm.”

Describing Deltec as “an innovation hub”, and where staff should be “surrounded by innovation”, Mr Chalopin added: “I would love to see Deltec be the most successful international bank of innovation. First and foremost, I believe this is the world we live in.”

The Deltec chair drew cheers and applause from the audience when he responded “roads”, after the moderator asked him what he wanted to see improved most in The Bahamas. When asked what he loved most about The Bahamas, Mr Chalopin replied “everything”, which resulted in the moderator saying: “I knew it. He’s a patriotic guy.”

Meanwhile, Ryan Pinder KC, the attorney general, yesterday told the same conference that when it came to regulation of the digital assets industry The Bahamas “cannot sit on our hands; we need to keep pace with industry developments”.

Pointing to the upcoming reform of the Digital Assets and Registered Exchanges (DARE) Act, he added: “The revisions are designed to minimise systemic and contagion risks. The amendments strengthen the protection mechanisms such as new disclosure and reporting requirements, specific registration obligations and enhance the legal framework to allow for more activities in the space under regulation.

“Examples include providing advice on, or the management of, digital assets; providing digital assets derivative services; providing DLT network node services; and providing staking services, which will be a first-of-its-kind disclosure regime for staking in the world. Again, leading from the front.

“The new DARE Bill focuses on consumer protection and provides a robust approach to protecting client interests and custody or wallet service providers’ ability to return client assets, maintain procedures to ensure continued safekeeping and accessibility of digital assets, and make the required client disclosures,” Mr Pinder continued.

“It establishes a new cutting edge regime for stable coins, providing a clear definition of what a stable coin is, providing for registration and causing for adequate reserve assets to be in place.” The attorney general also questioned whether The Bahamas will have to “go further”, and develop initiatives such as a regulatory framework for artificial intelligence (AI) in finance.

Pointing to planned cyber security legislation and an overhaul of the Public Disclosures Act, Mr Pinder said plans to enhance The Bahamas’ data protection and security regime might lead to the “most modern data protection regime, where it applies to fintech and the digital space, in the world”.