South African Regulator Seeks More Crypto Powers After Alleged Ponzi Schemer's Collapse

“At the point something becomes a Ponzi scheme, we have lost our jurisdiction,” a regulator told Bloomberg.

By Tanzeel Akhtar

Jan 27, 2021 at 2:06 p.m. UTC

Updated Sep 14, 2021 at 11:02 a.m. UTC

Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Secure Your Seat

Tanzeel Akhtar

Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Secure Your Seat

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.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

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. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Tanzeel Akhtar

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

Tanzeel Akhtar