South Africa’s Financial Regulator Is Planning Crypto Rules to Protect Vulnerable Population: Report
The regulations will be unveiled in early 2022 as a response to two major scams that defrauded investors of significant sums earlier this year.
Dec 10, 2021 at 2:39 p.m. UTCUpdated May 11, 2023 at 6:35 p.m. UTC
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South Africa’s Financial Sector Conduct Authority (FSCA) is preparing a regulatory framework for crypto to protect the more vulnerable members of its society.
- The regulator wants to establish rules on how crypto trading should be conducted, according to a Bloomberg report Friday.
- “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,” FCSA commissioner Unathi Kamlana said.
- The regulations, which will be unveiled early in 2022, are being brought forward in response to two major scams that defrauded investors of significant sums earlier this year.
- In June, the founders of crypto investment firm Africrypt disappeared with around $3.6 billion of bitcoin. This followed the Mirror Trading International (MTI) scam that defrauded investors of some $589 million.
- The FCSA is also aiming for its framework to address how crypto interacts with traditional finance products and balance sheets and the threat they may pose to financial stability.
- Kamlana urged would-be crypto investors to “wait to see” how the Reserve Bank progresses on its work on a central bank digital currency.
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Jamie Crawley is a CoinDesk news reporter based in London.