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Crypto Balance Must Combat 'Scam Artists'

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Gowon Bowe

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Bahamas must strike a balance between facilitating initial coin offerings (ICO) and crypto currency exchanges and combating "scam artists", a top accountant urged yesterday.

Gowon Bowe, the Bahamas Institute of Chartered Accountants (BICA) president, told Tribune Business: "I think for us locally we need to understand what it is and not stifle those who are willing to jump into that space.

"The vast number of crypto currency offerings are not going to be by Bahamians but international investors. What we need to do is protect against scam artists. There is a balance between free market economics and reputational damage."

Mr Bowe, a speaker at the Higgs and Johnson law firm's annual conference, added: "It's not a question or opportunity to be the first movers, but there has not been a willingness from any major jurisdiction to embrace it unreservedly. Everyone has reservations and concerns about it.

"There is a desire to separate the sheep from the goats as it relates to what are legitimate crypto currency operators and those designed to take funds from people eager to ride the tiger and lose all their funds. The difficulty is that the large majority of crypto currencies have no underlying asset that you can understand where the value is coming from."

Bahamian financial regulators are said to be exploring the creation of appropriate regulatory regimes for the emerging blockchain technology and cryptocurrency sectors. Crypto currency advocates have urged The Bahamas to adopt legislation as a key element in plans to establish the nation as a "financial technology" of Fintech hub.

The Central Bank of The Bahamas, responding to a recent spate of companies promoting ICOs and crypto/blockchain solutions, has already moved to warn Bahamians of the risk involved in investing in an unregulated, still-evolving industry.

"The Central Bank of The Bahamas wishes to advise the public that no licence has been granted to crypto currency operators by the Bank or any other financial regulator to offer digital currency, or to provide such services such as cryptocurrency exchanges, crypto loans or crypto and fiat processing in or from within The Bahamas," the regulator warned.

"Persons investing in such products and services do so at their own risk." The Central Bank added that crypto/digital currencies were not legal tender in the Bahamas, are not issued or backed by it, and are not legal foreign currency either.

"The Central Bank does not regulate or supervise virtual currencies, nor has the Bank authorised any entity to operate a virtual currency platform," the Central Bank reiterated. "The public is further advised to seek professional advice with respect to matters regarding savings and investments from legitimate and licensed financial institutions."

This led one Bahamian cryptocurrency advocate to call for a friendly regulatory regime that would encourage Bahamian entrepreneurs to bring technology-driven solutions to market.

Wayne Johnson, a corporate manager for the Zucaz Group, told Tribune Business: "The digital economy is here to stay. The legislators have to be thorough with their legislation, but they must do it in a way that creates enthusiasm for entrepreneurs to be able to create solutions in this marketplace.

"You shouldn't bring legislation to block people from the marketplace, but bring solutions to encourage people to start new businesses and bring new wealth into the economy."

Dr Donovan Moxey, head of the steering committee for the Government's Grand Bahama 'technology hub', recently said a regulatory framework to facilitate ICOs and crypto currency exchanges in The Bahamas could be completed within 30 days.

"We are working on a regulatory framework around initial coin offerings (ICOs) and exchanges. I'm a part of the group putting together the regulatory framework, and we hope to have that done in the next 30 days," he confirmed.

Comments

banker 8 months, 3 weeks ago

"It's not a question or opportunity to be the first movers, but there has not been a willingness from any major jurisdiction to embrace it unreservedly."

Gowon is wrong. The Cayman Islands have embraced it unreservedly and as a result, they are now the world's blockchain center, beating out Crypto Valley in Zug Switzerland. As a result, we are not even in the race to be an emergent technology or blockchain center. We can never catch up, and our financial services will die, being replaced by a Fintech digital economy that is vibrant in more progressive regimes. Once again we will be crumb-catchers from Cayman and Switerland's tables.

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