Minister in the Ministry of Finance and Economic Affairs Ryan Straughn is urging residents to think twice before putting their hard-earned money in “fancy schemes” that promise multiple returns on investment.
At the same time, he is giving the assurance that a vigilant Financial Services Commission (FSC) was in the process of upgrading its structures to better monitor emerging trends.
Straughn said while he encouraged investment, he did not want Barbadians to “play fast and loose with their money”, and he warned against residents investing in various schemes unless they give it very careful thought and are able to get information on the entity providing the returns.
“All I can say to Barbadians is to pause with any of these fancy schemes. The reality is that we have to pay very close attention to when we are starting to feel that sweet feeling before we part with our money in order to make sure that we can protect ourselves,” said Straughn.
“By the same token, we must ensure that people are not taken advantage of in this country, particularly when it comes to matters that they don’t quite fully understand and where the technology is moving so quickly, that from a regulatory and IT perspective nobody can truly say where this money is coming from and how is this appreciation being generated,” he said.
“The FSC is in the process of upgrading in terms of its structure because we recognise we need to get new skills in to help monitor some of these emerging trends,” he said, pointing out that regulation had to “follow what the emerging technology is”.
“We will remain absolutely vigilant in Barbados to ensure we can protect Barbadians from fraud, but we can only protect Barbadians from fraud if they report the said fraud,” he said, noting that too many people were ashamed to come forward.
Straughn pointed out that globally, central banks and other regulators were fining entities for illegally operating and providing investment-like services that promised hefty returns.
Singling out crytocurrencies as an area of concern, Straughn said “What persons seem to be most attracted to is the so-called ease with which you can put money onto a platform and then you see that money notionally increase in value.”
However, he added, “The problem always comes when you see this increase in value you still have to come back into the real world and buy something from somebody.” That currency, he said, may not be accepted by some people as legal tender.
“It must be made absolutely clear that in a rapidly evåolving environment between the Financial Services Commission and the Central Bank, they have a responsibility to make sure that anybody that comes into the space is fit and proper and they are not going to unleash any technology that will inadvertently take advantage of ordinary Barbadians, which then will see not just public outcry . . . [but] financial fallout,” said Straughn.
Recalling the CLICO fiasco in which Barbadians and other Eastern Caribbean nationals lost billions of dollars, Straughn said “It is important that while we find the right balance with respect to regulation on these instruments that Barbadians also pay attention to where they put their money”.
“If there is nobody that you can call really and ask a serious question about who is in charge of the entity and what is the underlying asset that is driving the performance of the entity, I can only caution people to think very carefully about where you choose to put the little change that you may have extra
“We want to encourage investment but we want to encourage investment that is responsible both domestically, regionally and internationally [and] we need to do it in a way that is seamless as possible,” advised Straughn.
He was leading off debate in Parliament on Tuesday on the Financial Services Commission (Amendment) Bill and the Financial Services Commission (Miscellaneous, Provision and Validation) Bill.
Noting that a lot of people were now looking for “the fastest way to make some money”, the economist urged Barbadians, “Think as many times as you want before you put your hand in your pocket and give somebody this money because chances are you will not see it again.
“Therefore, I say to people, if you do not see the asset that thing is going into, then chances are it is fraudulent . . . and once the money is gone, there is no FSC to go to because the person is not regulated in the space. There is no central bank to go to because the person is not regulated in the space and chances are, by the time the police catch up, the person abscond and gone already and move to another jurisdiction quite easily,” said Straughn.
