Chinese Investor and Senior Samoan Chief Plans to Build Crypto Hub in Paradise — BenarNews

Chinese Investor and Senior Samoan Chief Plans to Build Crypto Hub in Paradise — BenarNews

At an elaborate event in Hong Kong on April 26, the island nation of Samoa learned about its vision for the future: a cryptocurrency and stock trading hub in the South Pacific.

Chinese officials and businessmen spoke to celebrate the official launch of the Samoa Digital Asset Exchange, the Samoa Stock Exchange and the Oceania Blockchain Special Economic Zone, with their resumes projected onto a large screen at the luxury St. Regis hotel.

A number of Westerners with backgrounds in the financial industry were appointed as advisors. Also revealed are each company’s chief technology officer, chairman, chief operating officer, and bright, abstract logo.

Samoa Finance Minister Mulipola Anarosa Al Morio delivered a speech and took a group photo. The National Emblem of Samoa, which represents national authority and is for official use only, was pasted and projected across the venue.

But more than a month later, after photos of the Chinese event circulated online and sparked suspicion among Samoans, Prime Minister Fiame Naomi Mata’afa moved to limit the damage.

A statement from her office said the Samoan government had not given any recognition or approval to the joint ventures, which were only proposals.

The cryptocurrency incident is not the only controversy Fiame has faced over poor governance and lack of transparency.

Days later, she canceled the first direct flight between China and Samoa after criticizing cabinet ministers Laurie Luatea SchmidtParticipate in a Royal Tour of Samoa.

It teamed up with a Hong Kong tour company to control the influx of Chinese tourist groups in Samoa from late May. Royal Samoa Tours was registered as a company in Samoa in April and its shareholder is Rosary Leilua, one of Laauli’s daughters.

Lawley, one of Samoa’s most powerful politicians, has also been linked to efforts to make Samoa a crypto-financial hub in the South Pacific, BenarNews found, and that cryptocurrencies and Chinese tourism overlap in other ways. Chinese businessmen involved in attracting more Chinese tourists to Samoa also hold key positions in stock exchanges and cryptocurrency businesses.

BenarNews and affiliated news organization Radio Free Asia reviewed information in Samoa’s business registry and other company records, Chinese-language media reports and financial databases, and photos of the Hong Kong launch.

“I believe I am under no obligation to respond to your request,” Lawley said in response to a list of his ties to the exchange compiled by Bernal News. “For the issues you ask, you can report whatever you want.”

Samoa’s Prime Minister Fiame Naomi Mata’afa attends the 79th session of the Economic and Social Commission for Asia and the Pacific at the United Nations Regional Office in Bangkok, May 15, 2023. (Sakchai Lalit/AP)

Samoa has a small economy and an underdeveloped financial system.

Cryptocurrency and stock exchange businesses could pose reputational and financial risks to the country, and could also work against the government’s goal of making the financial system more accessible. Fewer than half of the population has a bank account, and onerous collateral requirements for loans are holding back lending to businesses, the Asian Development Bank said.

Samoa, with a population of about 200,000, also bears the debt burden of China. Measured by the proportion of its total national debt, its debt burden is second only to Tonga among Pacific island countries.

Fiame canceled a Chinese port project in 2021 to avoid further debts to the Chinese government. Through aid, infrastructure and loans, Beijing has become a major force in the Pacific over the past few decades.

call for the resignation of the minister

Opposition politicians have called for the resignation of Raoli, the co-founder and senior leader of Fiame, Samoa’s current ruling party. Chieftain rank is a requirement to run for office in Samoa.

Cryptocurrencies are virtual currencies like bitcoin that are encrypted and spread over computer networks, supposedly avoiding control by central authorities and preventing counterfeiting.

Proponents say they will usurp fiat currencies created by central banks, but they have also been linked to crime, extreme volatility in asset prices and the excessive use of energy in the electronic mining of new cryptocurrencies.

Last year, many cryptocurrency exchanges collapsed due to hacks and a chain reaction of liquidity crises. A blockchain is a distributed database that records cryptocurrency transactions.

Companies held in Hong Kong as Samoa’s financial future are registered in Samoa and appear to be largely inactive pending a series of changes in name, directors and shareholders between 2019 and 2022.

Samoa’s business registry documents show that the council of village chiefs, which includes Sasina of Rauli village, of which he is a key member, became shareholders in the three companies in the last quarter of 2022. Meanwhile, the Lawley constituency office is the registered address of the companies.

A shareholding document shows that the council (Samoa’s Alii ma Faipule Fagaee Sasina Letui) became a shareholder in the Oceania Blockchain Special Economic Zone in November 2022 when shares held by Laauli’s daughter Isadora Schmidt were transferred to the economy. sar.

Isadora Schmidt is the contact person in the Samoa Digital Asset Exchange and Oceania Blockchain SEZ business registration documents and is also a director of the Blockchain SEZ. She did not respond to a request for comment.

In December last year, the shares held by Lussil Tuala, the wife of the CEO of the Samoa Gaming Regulatory Authority, were transferred to the Samoa Stock Exchange and the Samoa Digital Asset Exchange, and Alii ma Faipule Fagaee Sasina Letui became the Samoa Stock Exchange and Samoa Digital Asset Exchange. Shareholders of digital asset exchanges.

Among the shareholders and directors are several Chinese, with addresses in Hong Kong, Shenzhen, Fujian and Auckland, New Zealand. It is unclear whether they are the actual owners or nominal shareholders.

The other shareholder of the three companies is China Yun Dat Investments. It is registered in the British Virgin Islands, which allows companies to keep ownership information confidential.

CPP Attends Blockchain Conference

The Oceania Blockchain Special Economic Zone and its sister companies launched in Hong Kong have ostensibly official support from the Chinese government.

Two members of Hong Kong’s Legislative Council and two members of the Chinese People’s Political Consultative Conference attended the ceremony. The Chinese People’s Political Consultative Conference plays a coordinating role in the ruling Chinese Communist Party’s “United Front” efforts, which include a covert foreign influence campaign.

Chen Gen, the co-chairman of the Oceania Blockchain Special Economic Zone announced at the meeting, is a veteran of China-related organizations such as the China Overseas Chinese Chamber of Commerce and the Chinese Academy of Management Sciences.

According to Chinese media reports, Chen accompanied Lawley on a tour of Henan province in 2018.

According to Chinese media reports, recently, in his capacity as the executive chairman of the Overseas Chinese Chamber of Commerce in Hainan Province, Chen helped facilitate the currently canceled direct flight from Hainan to Samoa and organized a delegation of businessmen to participate in the inaugural flight.

An advertisement for the Bitcoin cryptocurrency is displayed on the streets of Hong Kong, February 17, 2022. Bitcoin is an online currency that allows people to conduct one-to-one transactions, buy goods and services and exchange currency across borders without involving banks, credit card issuers or other third parties. (Kin Cheung/AP Photo, File)

Besides Rauli, other high-profile Samoans linked to the exchange include Samoa Gambling Control Authority chief executive Siaki Tuala and Lussil Tuala.

Their law firms provided administrative services to the companies, they said. They said they acted temporarily as nominee directors and shareholders while the founders finalized the joint venture partners.

Responding to questions, Lussil Tuala said: “Given Mr. Tuala’s long-standing relationship as a former lawyer, at the request of these clients, Tuala and I agree to be listed only as directors in nominee and registered with the company. as the initial subscribing shareholder.

They stated that they have no financial interest in the blockchain economic zone and exchange companies. They did not answer questions about a Samoa-registered company they jointly own with China’s Yunda Investment and one of the directors of the Samoa Stock Exchange.

For now, all that seems to be left of this cryptocurrency hub are colorful signs and thwarted ambitions.

The Samoan government said it would conduct a feasibility study in cooperation with international financial organizations to identify all risks, including to the country’s reputation.

“The purpose of this study,” it said, “was to see whether such a move would benefit Samoa.”

Radio Free Asia researcher Mary Zhao contributed to this report.

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