MP Dunkley: ‘Hype Has Outpaced Discussion’

May 7, 2018

“We want growth, opportunity and jobs for Bermudians and will support the Government with any initiatives that have the potential to do such but we will never hesitate to ask questions and raise concerns where appropriate,” Shadow Minister of National Security Michael Dunkley said, adding that the “hype” around digital currency initiatives has “outpaced substantive sober discussion.”

Speaking in the House on Friday, Mr Dunkley said, “Over the past week we have seen the passage of the ‘Companies and Limited Liability Company [Initial Coin Offering] Amendment 2018, full of last minute amendments that the Opposition had little time to vet, two announcements about MOU’s, the news that Bitt will advise on digital currency and the Ministerial statement today by the Hon. Premier.

“I will not reflect on the debate last week but it is appropriate to go over what has happened since. First there was an MOU announcement last Friday with Binance, as the Premier has said, who is the world’s largest Cryptocurrency exchange.

“The Premier goes on to say that Binance will

  • “develop its global compliance base in Bermuda
  • “sponsor university training for Bermudians in blockchain tech development and compliance
  • “through the Binance Labs make up to $5m available for investments in new Bermuda based blockchain companies
  • “as soon as practicable develop a digital asset exchange in Bermuda subject to all required legal and regulatory process and
  • “work collaboratively with the Government and all necessary oversight agencies in the development and improvement of a robust legal and regulatory framework.

“Then earlier this week the Premier signs an MOU with Medici Ventures and in this there is a commitment to

  • “make Bermuda its laboratory for the most leading edge blockchain innovations
  • “create 30 new jobs for Bermudians over 3 years
  • “as soon as practicable develop a security token trading platform in Bda
  • “develop basic, intermediate and advanced software development engineers
  • “work collaboratively with the GOB to develop all necessary oversight agencies in the development and improvement of a robust legal and regulatory framework.

“It was made public that Bitt and Gabriel Abed will provide advice and expertise to the GOB on digital assets and blockchain technology. Even better, in the Premier’s view, is that this advice will be at no cost to the taxpayer!

“All of this seems like a great opportunity, even if most of the people we serve know little about this type of stuff. And even though I share some of the skepticism by many at this point, we should work on this opportunity, but be real about it without promising the world.

“So I have comment and questions in the short time period of time I have left on the Motion to Adjourn.

  • “Binance has committed to developing its global compliance base in Bermuda. Well Mr. Speaker reports claim that Binance left China ahead of a government ban on Cryptocurrency trading and Japanese operations have been questioned with stricter regulations perhaps leading it to announce its intentions to open an office in Malta this past March. So it might be wise not to hold our breath that Bermuda will in fact be its global compliance base as in my humble view Binance appear to be seeking any place to do business which will welcome them on their terms and their track record on jurisdictions is short and moveable.
  • “That brings me to a question; the MOU says they will develop a digital asset exchange in Bermuda subject to the legal and regulatory process. But hold on a second Mr. Speaker, here is a company that has a questionable record of wanting a sound regulatory environment and secondly is also being asked in the MOU to work with the GOB to develop the legal and regulatory framework!

“Really Mr. Speaker, this can’t be the best way to conduct the islands affairs?

“We rush through legislation last week with a myriad of last minute amendments and announce this MOU on the same day. Mr. Speaker this might be too close for comfort, seemingly a conflict of interest and a potential cloud forming on our good reputation.

“The Premier is pictured on social media wearing a Binance sweatshirt with principles of the company? A fun social media picture but for the Premier of Bermuda?

“Seriously Mr. Speaker, the Minister of Finance is an important part of the regulatory regime and thus it is appropriate to maintain a healthy distance and independence; this type of picture makes it look way too cozy with potential first movers.

“Moving on Mr. Speaker,

  • “Earlier this week the announcement of the MOU with Medici says they will help develop the robust legal and regulatory framework. So we have another company who wants to conduct business in Bda and is in on developing the framework. What is the cost to Bermuda for this MOU? Why did we not cast the net and see if others might want to bid on this opportunity?
  • “And yesterday it is announced that we have a ‘free’ consultancy by Bitt and Mr. Abed, which was not mentioned in the ministerial statement by the Premier this morning; that is in itself an interesting omission. Mr. Speaker nothing in life is free. And, as qualified as the Premier says this gentleman is, I can’t fathom he would do it out of his love for the island or a friendship with the Premier or anyone else.

“But wait Mr. Speaker, we learn that Medici is an owner of Bitt and actually increased its ownership in the company just this past March with another 3m dollar’s worth of investment. This is the second investment with 4m being put in during 2016.

“So no wonder we have a ‘no charge consultancy’ as the ‘parent’ company, my words, needs a legal and regulatory framework that it agrees with…and Bitt can influence that and at the same time support its ownership.

“Mr. Speaker this all appears to cozy, does not pass the initial test of scrutiny, does not bode well for the future potential of this initiative nor does it support our reputation as a first rate, open and transparent place to do business.

“We want growth, opportunity and jobs for Bermudians and will support the GOB with any initiatives that have the potential to do such but we will never hesitate to ask questions and raise concerns where appropriate.

“In closing Mr. Speaker, as someone said to me, ‘none of this is to say there isn’t a potential business here in Bermuda, but the hype has outpaced substantive sober discussion.’

“In this case there are many questions that need to be answered and much more information on this subject that needs to see the light of day. “

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Comments (25)

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  1. legalgal says:

    Binance want a blank cheque. We need experts (who are thin on the ground) to set this up. Cayman is ahead of the game but a distinction has to be made between Cryptocurrency and blockchain tech. The reputational damage/risk to assisting the Darknet/deepnet world of transactions is not worth a few jobs.

  2. nerema says:

    Bitt is based in Barbados and launched its digital asset exchange in Barbados in April 2015. Three years ago.
    So how can believe that they now intend to make Bermuda the centre of their universe?
    How successful have they been in Barbados in the past three years? How many jobs have been created?
    Why is Burt so impressed with a $m investment in this firm? In the finance world, that is peanuts. It’s pathetic. Doesn’t Burt know this?
    Why are we encouraging a company involved in a complicated and new finance techniques write the regulations that they themselves will operate under? Does Burt seriously not understand the inherent problems with this?

  3. nerema says:

    $3m investment

  4. Politricks says:

    One thing Dunkley is absolutely right about it, is that no one provides Government consultancy services for ‘free.’ Very suspicious indeed.

  5. Alan says:

    He really is an embarrassment – why not just wish it well and trust that the Government has done all necessary due diligence. I have the feeling Michael would throw the whole country under a bus if he thought it would make him Premier again. As usual, it’s all about Michael…

    • Double S says:

      Are you guys kidding me? For 4.5 years the PLP lambasted any idea put forward by the OBA and even besmirched actual and potential foreign investors.

      Now you guys think that everyone should just shut up and bow down.

      Bunch of hypocrites you PLPers are.

    • joly says:

      “and trust that the Government has done all necessary due diligence”
      That’s the point: Gov does not appear to have done all necessary due diligence.

    • Truthertz says:

      This is a joke right?

      During the PLP’s tenure as Opposition they vehemently attacked any and every economic stimulus idea promoted by the OBA. A few examples being how you lot tried to rile up protest against the St. George’s hotel by falsely claiming that locals would lose access to the beach whilst you guys couldn’t stop the promoting and pushing overwhelmingly negativity about the America’s Cup to the point where you advocated for Bermuda to boycott it all together. Let’s not talk about the airport deal in which your crew riled up people and had them shut down our duly elected Parliament.

      And no point did I hear any of PLP representative or supporter state what you did above :

      “why not just wish it well and trust that the Government has done all necessary due diligence.”

      Instead you tried to sabotage each and every idea put forth just because of you undying and unrelenting lust for power. You and your team were ready to bring the whole down (even further then you did in your last time at the trough) just so they could become Government again.

      On top of that your statement indicates that you do not believe the PLP Government should be challenged at any point. A very scary belief, but not surprising.

      So take your faux outrage and hypocrisies elsewhere.

      Or try something hard and actually provide a factual rebuttal for once you raving hypocrite.

      • Alan says:

        The factual rebuttal is your boy Mikey has led two so-called different parties to heavy electoral defeats. Even if he bullied his way back into the top spot (that’s what he’s done his entire life), there’s little doubt that he would lose again – so it really makes little difference what he says. He needs to buzz off and make space for new voices.

        • Truthertz says:

          So basically you have nothing in terms of rebuttal and instead attack the messenger whilst also displaying the traits of a sheep supporter (based on your original statement). Congrats, you must be proud.

    • Joe Bloggs says:

      “why not just wish it well and trust that the Government has done all necessary due diligence”


    • jt says:

      “Wish it well and hope government has done all necessary due dilligence.”
      Just like the PLP always did with OBA initiatives. Was there even one where they did so?

    • Kevin says:

      you must live in a plp bubble,,,,,their reputation has proven that they are atrocious at managing projects or growing the economy ..there shouldn’t be one Bermudian who should trust them on not further destroying our way of life. 13 years of mismanagement
      Kings wharf
      Hamilton Police Station
      International Business Exodus
      Port Royal
      Club Med Debacle
      St. Georges Golf Course

      Do I need to go on

      I can’t trust them and will never vote for them ….

  6. ??? says:

    He’s not wrong. Plenty of companies and hedge funds have put tons into cryptocurrencies expecting massive gains and have watched their dollars turned into cents. Crypto is extremely volatile and I think the last bitcoin rush of 2017 was the last time any drastic gains will be made for the foreseeable future. Way too many people jumped in on the FOTM and lost big time

    • frank says:

      warren buffet has predicted that bitcoin will not end well
      and I will take his advise
      this is a man that knows his way around money matters
      this will not create no real jobs
      Bermuda should do more research before rushing into this arena

  7. facts of the rock says:

    crypto currency is a big con and the plp have fallen for it hook,line and sinker!

    • wahoo juice says:

      …or perhaps rather the majority of voters have fallen for it. As Mr. Dunkley points out the roll out of the M.O.U.s was “hype”, it felt like watching some sort of corny slight of hand show. Warren Buffet says that the crypto currency is “rat poison cubed”, I think I will go with the guy who has some proven financial smarts.

  8. Athena says:

    At the latest Berkshire Hathaway shareholders meeting Warren Buffett, aka ‘Oracle of Omaha’ predicted “bad endings” for crypto currencies like Bitcoin.

    Think he might know more than a certain Bermudian?

    • aceboy says:

      “Billionaire investor Warren Buffett on Monday said buyers of bitcoin, which he has characterized as “rat poison squared,” thrive on the hope they’ll find other people who will pay more for it.”

      But Buffet has nothing on the brilliance of Burt.

      Cryptocurrency doesn’t remind me of “Faith Based Tourism” or the “Black Mayor’s Conference” at all.

  9. Aware says:

    This is a measured piece and should be given thought outside of “politicking”. Bermuda has a stellar regulatory reputation and we must not even consider diluting that. Hopefully everyone on this island supports economic growth, opportunity and jobs, but make sure they are the right ones please. If our reputation is damaged, it will not be easily restored.

  10. watching says:

    This guy…loves attention…

  11. Imjustsaying says:

     STAY AWAY FROM BITCOIN. This guy is gonna take Bermuda for a ride. I thought Premier Burt was smarter than that. The bitcoin market is “completely unregulated” and, thus, no protection is provided by the authorities. “It is the responsibility of the individual” and investors
    Danmarks Nationalbank director Lars Rohde argued that bitcoin is “dangerous” and, likening bitcoin investment to gambling
    Many banks do not allow its customers to use  credit and debit cards to purchase cryptocurrencies.

  12. Imjustsaying says:

    (Reuters) — Billionaire investor Warren Buffett on Monday said buyers of bitcoin, which he has characterized as “rat poison squared,” thrive on the hope they’ll find other people who will pay more for it. If Warren Buffett doesn’t like it then it’s no good.

  13. Blah..blah…
    DID ABSOLUTELY nothing for BORN BERMUDIANS.. blah..blah
    meaningless talk.
    He needs to keep his hands bound.

    • SMH says:

      blah blah…the plp will do, has done, nothing for TRUE, BORN BERMUDIANS…not those imports!