Early next year, South Africa’s financial authority plans to unveil a regulatory framework for cryptocurrencies. This move comes after individuals lost billions from crypto scams.
This was disclosed by Unathi Kamlana, Commissioner of the Financial Sector Conduct Authority (FSCA) to Bloomberg.
The guidelines, which were developed in collaboration with peers such as the prudential authority and the financial surveillance board, will govern how Ethereum, XRP, and Litecoin trading should be performed.
Backstory
Regulations were introduced in response to two big crypto frauds that originated in South Africa, both of which resulted in the disappearance of billions of dollars in investments.
The Cajee brothers ran a cryptocurrency investment platform from South Africa that the local regulator suspects of being a Ponzi scheme. Ameer and Raees Cajee, who have been running Africrypt in Johannesburg since 2019, appear to have vanished, along with an estimated $3.6 billion in Bitcoin.
Over the last few years, digital currencies have risen from the outskirts of the financial world to the centre, prompting more scrutiny around the world to prevent providers from operating unchecked.
The guideline would also take into account how currencies interact with traditional financial products, the risks they represent to bank balance sheets, and whether or not they pose a threat to fiscal stability.
What they are saying
According to Unathi Kamlana, the new framework would decide how cryptocurrencies like bitcoin (BTC) should be traded. During the interview, Kamlana implied that his firm was not keen on approving high-risk products.
He said, “What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky, We must be very careful to not just legitimize them.”
While Kamlana believes cryptocurrencies do not yet pose a systemic risk to the financial services sector’s stability, the FSCA views them as an asset rather than a currency.
The South African Reserve Bank’s ambitions to build its own stable coin are being monitored by the regulator, who sees this as the most responsible approach to innovation, according to Kamlana.
“I think that if I were to give advice to retail investors, I would say wait to see what comes out of the process of the work of the central bank,” he said. “The best outcome in terms of stable coins is what comes out of central bank innovation, given their reliability and stability.”
The Crypto Currency Authorities should monitor every Brokers and Account Managers activities, I lost over $530,000 to unregulated Brokers who convinced me into investing my capital. After some successful trade and my profit increased I made a withdrawal request but surprisingly all my withdrawal request was declined , I contacted their customer service unit but i was not given a meaningful Reason why my request was declined. I tried all I could to withdraw my fund but no solution , at the end I lost all my capital without a single profit return. In search for help on how to get my money back I was directed to contact Mr Dylan who works with SUMMITRECOUP DTcm as their Head of Recovery Affairs, I contacted him and explained my situation to him , he requested for some details about the broker and concerning my investment, I forwarded all the details to him. It was all like a dream , through him I was able to get back all my money , please don’t sit back and cry when you facing difficulties in withdrawing your profit or you totally lost your funds to any Broker or Account Manager , kindly contact Mr Dylan now. Their website SUMMITRECOUP DTcm I assure you a successful recovery of your funds.