South Africa’s financial market regulator is seeking greater oversight of the cryptocurrency trading industry following the collapse of a bitcoin company alleged to have been the nation's biggest Ponzi scheme.
- Brandon Topham, head of enforcement at the Financial Sector Conduct Authority (FSCA), told Bloomberg Tuesday his agency is making new proposals to regulate cryptocurrencies in order to be able to prosecute fraudsters.
- “At the point something becomes a Ponzi scheme, we have lost our jurisdiction,” Topham told Bloomberg. “We need the police and the prosecuting authority to work fast and put people in jail.”
- The move comes after a recent FSCA investigation into Mirror Trading International (MTI), a bitcoin trading club that had allegedly been operating illegally and lied to investors.
- As reported by CoinDesk, MTI had claimed to be able to create profits of 10% per month by using bots to carry out high-frequency trading using client’s pooled bitcoin.
- The firm was declared fraudulent by Texas state regulators in July last year, and the FSCA probe concluded MTI deliberately misled investors and operated a financial service without a license.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.