The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian entrepreneur seeking to raise $5m to finance a crypto currency asset exchange has backed the deputy prime minister’s call for regulation of this space.

Ricardo McHardy, principal of Blue Cay Capital, told Tribune Business he agreed with KP Turnquest’s call for The Bahamas to impose proper supervision in a bid to prevent “disastrous situations” occurring in this sector.

Mr McHardy, whose background is in e-commerce and digital marketing, unveiled plans to launch the capital raising for a Bahamas-based crypto asset exchange - focused on the Latin American and Caribbean market - “before the start of the new fiscal year” on July 1.

He said he aims to raise the financing from crowdfunding, and pledged that only sophisticated investors “who know what they’re doing” will be targeted with all participants “white listed”.

“This is my thing to raise money and see if we can get something going in The Bahamas and grow the company from there,” Mr McHardy explained. “It [the exchange] will function on the blockchain, doing spot trading, futures trading, contracts trading.

“We want to aim to provide as much liquidity as possible, especially regarding crypto assets. They’re so volatile that if you make a profit you want to get it out. We’re targeting Latin America and the Caribbean, and crypto users that want to operate a second account. It will be foreign exchange and whatever they want to trade - futures, oil, gold.”

Mr McHardy said he was “not striking while the iron’s hot, but it’s out there and I see an opportunity to do it”. While the crypto space is currently unregulated, he added that “we’d be prepared when the time comes” for it.

“We’re not concerned about the crypto winter,” Mr McHardy continued, referring to the so-called “bear market” faced currently by much of the sector. “If you ask me it’s mainly do to with ‘big money activity’ from some of the the major Wall Street banks; the creation of futures to short Bitcoin, in particular, creating market panic which brought about mass digital financial asset selling.

“It’s all about sentiment. When financial market speculators and investors alike are confident, they will buy and hold, but when the media goes into a frenzy for some agenda, people get worried and want to liquidate their position. It’s no different than the current US bond market yield curve starting to retract and eventually invert...”

“Ultimately, good products and companies withstand the turmoil and that’s what we want to be; a good company with a good product doing business the right way.”

Mr McHardy said he would be interested in partnering with the Caribbean Blockchain Alliance and other groups, adding that his proposed exchange will be scaleable and able to support large operations as well as provide data security.

Mr Turnquest last week confirmed that legislation to regulate the crypto space was being drafted through the Securities Commission, with crypto currency exchanges and companies operating already expressing interest in setting up operations in The Bahamas.

And the Central Bank of The Bahamas, responding to a rash of companies promoting initial coin offerings (ICOs) and crypto/blockchain solutions, last year moved to warn Bahamians of the risk involved in investing in a still-evolving industry.

“The Central Bank of The Bahamas wishes to advise the public that no licence has been granted to cryptocurrency 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 Central Bank 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.”