African crypto-regulations structures are dysfunctional. Digital assets are still not currencies. Fresh regulatory policy arrives after a large scam.
Adoption of digital currencies is gaining ground in many African countries. Regulatory bodies have always been dysfunctional in African nations. Africa has no cryptocurrency regulatory structure yet they use crypto. It was reported that crypto regulations structure in African countries is in dead end.
According to Bloomberg, the South African Financial Sector Conduct Authority (FSCA) plans to regulate all cryptocurrencies. The country’s top financial watchdog made this proposal as digital currencies have drawn more attention as crypto-related scams keeps increasing.
Failed Crypto Regulation
FCSA had proposed a crypto regulations policy before but it failed. The regulatory body had previously released a statement in November last year. They directed all current or intending financial trading companies to get their organization registered. They made the move to determine the number of digital currency trading platforms in the nation.
The proposal was backed with the Financial Act of 2002. According to the Act, digital currencies can be classed as financial commodities. This implies that all cryptocurrency related companies’ operation must be within the confines of the Act. The regulation did not regard digital assets as currencies. It also stated that the structure was erected to fight the rise of cryptocurrency-related frauds.
Owing to the failure of the former crypto regulation agenda, the cryptocurrency market remains unregulated. While fraudsters keep enticing unsuspecting investors with promises of high interest. As of now, fresh plans are being made to regulate digital assets.
South Africa’s biggest Ponzi scheme
The most recent attempt at crypto regulations came after Mirror Trading International (MTI) scammed over 25,000 investors. MTI is tagged as the biggest Ponzi scheme in South Africa.
According to the information supplied by Finance Magnates, MTI received over 20,000 BTC from investors all over the world. The amount of BTC collected is currently valued at $740 million. MTI promised mouthwatering rewards such as 10% monthly ROI.
Last month, a South African based magistrate offered a temporary liquidation against the company. However, what the liquidators uncovered was outrageous. The firm neither keeps records of account nor client’s detail. The liquidators were only able to recover about 170,000 distinct email addresses. They made this discovery in their raid in October.
Johann Steynberg, the Ponzi scheme’s mastermind also left the country and his location is currently unknown. The firm’s management blamed it all on Steynberg. They said he led them astray.
Brandon Topham, FSCA’s chief recently spoke with the publication. He stated that at the instance that something is a Ponzi scheme the regulatory body will lose its boundaries. He furthered that police are needed to arrest and quickly jail people.
Many questions lie unanswered as South Africans awaits the result of this crypto regulations. They await to see if the financial regulation will succeed this time. Moreso, it is still unknown whether the policy will negatively impact the world of cryptocurrency or not.