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O’Cof: ArawakX’s demise an opportunity for greater capital markets knowledge

The circumstances surrounding the suspension of crowdfunding platform ArawakX’s license by the Securities Commission of The Bahamas (SCB) is an opportunity for Bahamians to begin asking more questions about local capital markets and the players involved, and to learn more about capital markets in general, principal of firm Prospuh, N’Nhyn O’Cof, told Guardian Business.

As one of the youngest Bahamians licensed to operate a fintech platform in the country, O’Cof said he has had his share of setbacks and disagreements with the SCB. However, he said he understands the role of the regulator and its necessity in the financial space.

O’Cof believes that in the midst of the turmoil surrounding ArawakX, now is the perfect time for Bahamians to understand how all of the pieces of the financial industry fit together, so that they can make better investments in the future.

“I think people need to start asking questions about capital markets and understanding capital markets a little bit better,” said O’Cof.

“ A lot of those investments on [ArawakX], you know, broken down by any person that has any deep understanding of finance, none of them actually made sense. The valuations ever made sense.

“But once again, if you’re dealing with people that are eager to invest in different things, then obviously you’re going to always find Bahamians that are curious and interested.

“Now, I don’t blame those people, because we are as a people, opportunists. That’s a great thing that we are investing and that those people were investing.

“Outside of BISX, outside of ArawakX, we do need to build proper capital markets here in The Bahamas, just straight across the board, that people can trust, that people can believe in, that people understand, and that is a little bit more advanced.

“Capital markets where there’s a level of liquidity, where there’s level of understanding. But once again, that comes with another level of education outside of investing in general.”

Last week, the SCB began winding up proceedings of Mdollaz Ltd., trading as ArawakX, after finding via investigations and interviews that the crowdfunding firm is insolvent, that it commingled company funds with investor money, and that its principals sold Mdollaz shares without SCB approval.