FSA clarifies bribery allegation circulating on social media |23 August 2019
Following the circulation of a video on social media in which the head of a crypto currency trading platform is affirming that it is easy to bribe Seychelles with a coconut, there is a public outcry that the country lacks the necessary strong framework to regulate all the activities and transactions taking place in the financial services sector.
In a meeting with the press yesterday morning, the chief executive of the Financial Services Authority (FSA), Dr Steve Fanny, has refuted the allegation and tried to clarify the content of the video that he said came to the FSA’s attention some two months ago.
The comment is from a video interview by crypto currency derivatives trading platform BitMex chief executive and founder Arthur Hayes where he said in an argument with some gentlemen that “Seychelles is cheaper to bribe than them” and when asked how much he had to pay Seychelles he said “a coconut”.
Mr Fanny said that once the comment came to the FSA’s attention, the authority sought clarification from the company which quickly responded through their lawyers to explain.
“They explained that the word ‘coconut’ in that context simply meant that they did not have to pay anything to come to Seychelles because coconuts are in abundance in Seychelles which is a tropical island.”
Dr Fanny went on to explain that BitMEX came to Seychelles on its own free will and as one of its founders, Ben Delo, had previously declared publicly that he will give half of his fortune to charities around the world and when he offered to make a donation to the Ministry of Health, this was welcomed.
“Those people asked for nothing in return from Seychelles. They do not live in Seychelles, their company does not operate in Seychelles. Their company is just incorporated in Seychelles like any of the 200,000 companies that have been incorporated in Seychelles. Other than that none of them has anything else to do with Seychelles or needs to bribe Seychelles for anything and bribery in this context does not hold water,” Dr Fanny explained.
BitMEX was incorporated in Seychelles as an International Business Company (IBC) since 2014 after successfully completing all the necessary formalities so bribery cannot exist in this context as it has been incorporated through an agent but it operates overseas.
Dr Fanny stressed that Seychelles is one of the most compliant jurisdiction with a very robust and solid regulatory framework in place when it comes to our traditional products as well as regulations for Fintech activities,” Dr Fanny said.
It is to be noted that the FSA proposed a draft framework for a Financial Technologies or Fintech Regulatory Sandbox which was approved by the Cabinet in November last year before being presented as SI 36 to the Assembly on June 10.
Mr Fanny said the purpose of the sandbox regulation is to regulate all activities within the Fintech arena.
“This is because there is a large number of international business companies (IBCs) which are engaging in Fintech activities so we felt that as part of our responsibilities as a regulator, we are required to provide a safe framework for people to operate in these activities,” said Dr Fanny.
He pointed out that to do that the FSA sought the assistance of an international law firm as well as got the regulation to be tested by a reputed accounting firm.
“Today we are satisfied that our sandbox has stand up to all tests,” Dr Fanny added.
Asked as to why the crypto currency trading platform has earlier this week added Seychelles to its trade restrictions list preventing people here from trading on the platform, Dr Fanny said this is because there are potential risks for them to lose their hard earned cash.
He noted that when trading on such platforms there are two options open to you. Either you can trade as much as you like and lose your money or a restriction is put on you to prevent you from losing your money.