The Tribune

BY ANNELIA NIXON

TRIBUNE Business Reporter

anixon@tribunemedia.net

A SUBSIDIARY of BISX-listed Benchmark Bahamas yesterday signed a joint venture with a Swiss technology firm to establish a digital asset trading platform designed to position The Bahamas as a global leader in blockchain-based financial services once regulatory approval is secured.

The move, which comes as Benchmark’s celebrates its 25th anniversary as a publicly-listed company on the Bahamas International Securities Exchange (BISX), now awaits approval from the Securities Commission of The Bahamas for licences under the Digital Assets and Registered Exchanges (DARE) Act 2024.

The deal, involving its Benchmark Advisors (Bahamas) affiliate, is a tie-up with Swiss company, Ovryde Ltd, to create the Bahamas Ovryde Exchange (BOX), which is intended to be far more than a crypto currency exchange.

Julian Brown, Benchmark’s chairman, president and chief executive, described the venture as a transformative step for the country’s financial services industry.

“We have today signed a significant venture with our partners Ovryde to create the Bahamas Ovryde Exchange,” Mr Brown said. “It’s a digital infrastructure that is going to bring blockchain and digital currency trading, tokenised trading, to The Bahamas.”

He said the partnership combines Ovryde’s proprietary technology with Benchmark’s regulatory licences and decades of experience operating under the Securities Commission’s supervision.

The joint venture will see Benchmark apply for every category of licence available under the DARE Act, allowing the company to provide a broad range of digital asset services if approvals are granted.

“We’ve applied for every licence in the Act,” Mr Brown said. “So there are five different categories. We’ve ticked them all because the technology is that powerful.”

He added that Benchmark has been working on the project for around six months, beginning with discussions on strategic fit before moving into planning and execution.

“The only thing that we’re waiting on now, before we press the name on a letterhead, is the licence,” Mr Brown said, expressing confidence that the firm’s long-standing regulatory record would support its application.

Benchmark operates through two licensed subsidiaries that provide capital markets and brokerage services. Mr Brown said the firm’s regulatory experience would complement Ovryde’s technology, creating a structure designed to avoid governance failures that plagued previous digital asset platforms.

Mr Brown made a distinction between the proposed exchange and the collapse of FTX, the crypto currency exchange whose failure in 2022 damaged The Bahamas’ reputation as a digital assets jurisdiction.

“FTX was a fraud; it was structured incorrectly,” Mr Brown said. “The Bahamas made a short mistake in doing it because we wanted to advance ourselves into the new frontier.” He argued, however, that the country’s regulatory framework has since been strengthened through the updated DARE legislation.

“We have now adjusted our rules and created a new DARE Act 2024 to accommodate the errors and the loopholes that were in the first, and so the regulatory regime is a lot stronger,” he said.

Mr Brown maintained that The Bahamas now ranks among the world’s leading jurisdictions for digital asset legislation, and suggested other countries are modelling aspects of their regulatory regimes on Bahamian law.

David Kalberer, chairman of Ovryde Ltd, said the exchange’s biggest differentiator will be its use of self-custody technology, allowing investors to retain direct control over their digital assets rather than transferring them to the exchange.

“The user or the investor keeps control and sovereignty over the assets he brings into the exchange,” Mr Kalberer said. “That’s a lot different from how other providers do that.”

He said the Bahamas Ovryde Exchange will operate as a Bahamian company using Swiss and European-developed institutional grade technology rather than serving as an offshore branch of a foreign exchange.

“This is a Bahamas company,” he said, adding that the technology is capable of rivaling major global exchanges such as the New York Stock Exchange and the London Stock Exchange.

Sean Prescott, Ovryde’s founder, chief executive and chief technology officer, said the project brings together technology, regulation and location in a way that could integrate The Bahamas more closely into the global financial system.

“If people want to do remittance, if we want to connect The Bahamas to the global financial systems and vice versa, we now have the partnership, the legal framework, the regulatory and technology all in one place,” he said.

Mr Prescott said the platform has been designed in consultation with regulators and is built around cryptographic verification and self-custody principles intended to improve transparency and investor protection.

Addressing comparisons with FTX, he said users of the Bahamas Ovryde Exchange would retain exclusive control over their assets.

“When people were signing up to FTX, they were basically just handing over their funds,” Mr Prescott said. “With Ovryde and the technology for the Bahamas Ovryde system, we can prove to you; anybody that comes on the system, that we don’t have access to your money.”

He described the technology as independently audited and certified, with cryptographic safeguards preventing the operator from accessing customer assets.

Beyond crypto currency trading, Mr Prescott said the technology also supports tokenisation of real world assets, enabling ownership records and asset histories to be verified through blockchain technology.

Patrick Burke, a director involved with the venture, said the partnership combines Benchmark’s reputation in traditional financial services with globally competitive digital infrastructure.

“This isn’t state-of-the-art technology relative to The Bahamas,” he said. “This is state-of-the-art technology on a global basis.” He added that the technology is already fully developed rather than being a concept under development.

“This is built,” Mr Burke said. “This is actually ready to go. It’s leading edge today.”

If approved by regulators, the Bahamas Ovryde Exchange would become one of the first platforms to operate under the country’s revised DARE Act framework, which was introduced following reforms aimed at strengthening oversight of the digital asset industry after FTX’s collapse.

Benchmark executives said they expect the venture to attract international digital asset business to The Bahamas while reinforcing the country’s ambitions to re-establish itself as a leading financial technology jurisdiction.