By Ryan Hamilton-Davis

Copyright newsday

VIRTUAL ASSETS – digital representations of value that could be digitally traded, stored, transferred and used for payment or investment purposes – have always been a mystifying form of currency for the TT investor.

While local business gurus have hailed virtual assets as the way of the future, conservative investors have taken note of the many risks which include scams
and volatility in the market.

However, for most, virtual assets such as bitcoin and non-fungible tokens (NFTs) are something that still needs to be understood and regulated.

On September 12, Minister of Finance Davendranath Tancoo introduced the Virtual Assets and Virtual Assets Service Providers Bill 2025 in the House of Representatives, in an attempt to get a firmer regulatory grip on the digital asset industry. However, sections of the bill do not regulate the industry, but bans it altogether until December 2027.

Speaking to Business Day via WhatsApp on September 21, Tancoo said the bill was still a work in progress.

He said the fact that the industry was largely unregulated made it easy to facilitate money laundering for people involved in illegal activities.

“Like all legislation, this bill is a work in progress as this government seeks to introduce stronger financial legislation designed not just to curb money laundering and associated crimes, but also to penalise those responsible for siphoning billions of taxpayers’ dollars into the pockets of a special few,” Tancoo said.

However, some e-money traders likened the proposal to ban virtual assets to throwing the baby out with the bathwater, as the move could significantly stymie the progress of digital currency in TT.

They said that while regulation is necessary for the growth of the industry, it needs to be fostered, rather than restricted.

The bitcoin bill

In the draft bill, the ministry said its provisions reflect the framework set out by the Financial Action Task Force’s (FATF) recommendations on international standards for combating money laundering and the financing of terrorism and proliferations.

The following are some of the FATF recommendations:

* Regulation of virtual asset service providers (VASPs) to mitigate money laundering, terrorist financing risks associated with new technology.

* Traceability of wire transfers by requiring accurate originator and beneficiary information to accompany such transactions.

At present, there is no comprehensive legislative framework on VASP operations, but, the finance ministry said the Securities Act, Chapter 83:02 (“Securities Act”) becomes applicable where a virtual asset falls within the statutory definition of a “security.”

The bill also proposes a ban on “digital wallet service providers” – people who use computer software or programmes that interfaces with fiat and virtual currencies and assets, stores private and public keys and interacts with distributed ledger technology, to enable users to send, receive and monitor their digital assets.

Other activities under the proposed ban are: the exchange between virtual assets and fiat currencies; the exchange between one or more forms of virtual assets; the transfer of virtual assets; the safekeeping or administration of virtual assets or instruments enabling control over virtual assets; and the participation in and provision of financial services related to an offer of an issuer or sale of a virtual asset.

The bill also bars any new authorisation of people seeking to operate as wallet service providers or to carry on any virtual asset trade. However, it proposes that VASPs notify the SEC of their operations within one month of the bill becoming law, and also refrain from carrying out activities for another three months.

VASPs face fines as follows:

* Failure to notify the SEC of virtual asset activities – $125,000 fine on summary conviction.

* Unauthorised virtual asset activities before the three-month period – $5 million and imprisonment for five years.

* Individuals are liable on summary conviction to a fine of $500,000 for every day that the offence continues.

* Directors/business officers engaged in unauthorised virtual asset activities – $5 million and imprisonment for five years.

Continued engagement in unauthorised virtual asset activities – $500,000 for every day that the offence continues.

* Unauthorised advertising of virtual asset activities – $125,000 and a year in jail.

There’ve been recent incidents that showed the risks of the cryptocurrency enterprise.

In July a local newspaper highlighted that nearly 3,000 people that invested in Trillions Systems Ltd, a company that deals with cryptocurrency and forex exchanges have been waiting for more than ten months for returns.

In August, the SEC advised that Trillions, its promoters and representatives were not registered with the SEC.

In 2022, Sam Bankman-Fried, the owner of cryptocurrency exchange business, FTX, was slapped with seven counts of fraud in the US. More than a million people faced losses after the FTX crash worldwide.

Reuters reported that Bankman-Fried was accused of secretly using US$10 billion in customer funds to prop up the trading business, US$1 billion is still unaccounted for.

In the Bahamas, which was planned to be the company’s headquarters, Bankman-Fried, FTX, his parents and senior executives bought at least 19 properties worth nearly US$121 million over a two-year period.

Another unit of the company spent US$300 million in the Bahamas buying homes and vacation properties for its senior staff.

Crypto ban a step in the wrong direction

While the ban proposed in the virtual assets bill does not affect companies registered as e-money issuers such as WiPay, PESH and Wam!Money, several leaders in the digital currency space have spoken out against the ban, saying while regulation is required, banning cryptocurrency altogether is a regressive move.

Mark Periera, CEO of Wam!Money, one of the five companies registered with the Central Bank as an authorised e-money issuer, said, “Google is pushing its own stablecoin (a virtual asset pegged to a country’s currency). The US just passed the Genius Act. Black Rock (one of the world’s largest asset managers and a leader in financial technology solutions) is investing millions in bitcoin.”

“Japan, South Korea and Colombia are also launching their own stablecoin,” he said. “If you look at all these countries taking virtual assets by the reins
they are really progressive nations, but we, in a time like this where the world is taking a step toward cryptocurrency, we seem to be taking a step in the other direction.”

Periera said he voiced his objection to the proposed ban in a meeting with Central Bank governor Larry Howai on September 18, where he and others spoke about introducing TT’s own virtual asset.

“It was in that meeting we proposed TT issuing its own TTD virtual asset or TTD stablecoin so that optically, we could attract foreign direct investment and so that we could also tap into the remittance flows coming into the country that is going to Moneygram and Western Union and enable the local provider, WamNow to be a net forex earner.”

He also noted that TT has the capacity to develop a progressive virtual asset policy.

As part of the Fintech Association of TT, he highlighted that there were people in TT who have written virtual asset policies in countries such as Kenya.

“Regulation for virtual assets is necessary – I agree one hundred per cent because of consumer protection. What I don’t think is necessary is the ban. It is completely unnecessary because of the amount of literature and capacity that TT has to regulate virtual assets, we can do it. We have the local support to do it, and we have the industry that would enable us to fruitfully regulate with a more progressive bill.”

PESH money founder and CEO Simon Fortune expressed support for having clear regulation in place before cryptocurrency or stablecoin activity but he noted that a ban would slow TT’s progress in the short term.

“Having clear regulation in place ensures trust, transparency and consumer protection.

“At the same time, innovation cannot be placed entirely on hold. Ideally, regulation and innovation should advance together, through mechanisms such as regulatory ‘sandboxes.’ This allows entrepreneurs to build and test solutions while policymakers finalise the broader frameworks,” he said.

“However, it also creates an opportunity for government and industry to collaborate and get the regulatory foundations right.

“When the rules are clear, both citizens and businesses can participate in the digital economy with confidence.”

PayWise CEO Ian T Alleyne also welcomed regulation for virtual assets but said that the right regulation should also be put forward – one that leads to growth, development and customer safety.

“I think the bill falls short of actually doing this,” he said. “However, I believe that there is still an opportunity for amendments to be made so the bill doesn’t outright ban the use of virtual assets, but fosters the growth and development of the industry.”

Alleyne said that while there is still a negative connotation to cryptocurrency, it is being used in several different and positive aspects such as access to foreign exchange.

“There is a market that provides the means by which a person can access the equivalent of foreign exchange to do legitimate business abroad, such as paying for school fees.”

Pereira said virtual assets provide an opportunity for the country to creatively address its forex crunch.

“We have an opportunity to fix the forex problem for SMEs, however the government proposing this bill may put us right back in the situation we were in before where no one can access forex,” he said.

He also spoke on the fears of money laundering, saying that a ban would not necessarily stop money laundering through virtual assets, but instead make it more marketable.

“It is like shining a light in a dark corridor. That is what regulations actually do,” he said. “People launder money through banks and people launder money with cash. Cryptocurrency is just a new rail. You can regulate it but you are not going to stop money laundering altogether, just the same way with cash.

“The main thing is that we take front with cryptocurrency rather than ban it, because what that is going to do is push it further into the criminal realm and the black market and enable it even further to facilitate criminal activity.”

Alleyne said a bill to manage virtual asset operations should focus on regulation, but should also encourage innovation and dialogue on the growing technology.

“I think one of the more important aspects of this is one that encourages and supports data collection.

“We do not know what is the true size of this industry, but we know it is having a material impact on the man on the ground.

“This could be an opportunity for regulators to embrace the legitimate actors in the industry and start to determine the size and nature of the industry.

“That is what I would like to see in a virtual asset bill – things that foster growth by collecting data from legitimate operators in the industry.”