South African Regulator Issues Warning on FTX, Bybit

The Financial Sector Conduct Authority said the crypto exchanges are not authorized to trade in derivatives.

AccessTimeIconFeb 2, 2022 at 12:25 p.m. UTC
Updated Feb 2, 2022 at 4:34 p.m. UTC

Jamie Crawley is a CoinDesk news reporter based in London.

South Africa's financial watchdog issued a notice warning consumers to be "cautious and vigilant" when dealing with crypto exchanges FTX and Bybit.

  • The Financial Sector Conduct Authority (FSCA) said Tuesday that FTX is not authorized to trade in contracts for difference (CFDs), which are instruments that allow traders to speculate on the short-term movement of an asset's price.
  • "It has come to the attention of the FSCA that FTX might be offering the South African public, access to its online platform to trade in amongst others, derivatives instruments," the FSCA said.
  • "FTX is not authorised to give any financial advice or render any intermediary services in terms of the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act) in South Africa," the regulator said.
  • Sam Bankman-Fried, founder and CEO of FTX, tweeted that the company had reached out to to initiate a dialogue with the FSCA and was not aware of any prior attempted communication from the regulator.
  • The FSCA also issued a notice to the same effect regarding crypto exchange Bybit.
  • "Bybit has been in correspondence with the FSCA and will continue to engage in productive dialogues with the intent to resolve the issue to the satisfaction of all those involved," a Bybit spokesperson told CoinDesk.
  • Following a pair of major scams involving crypto companies in South Africa last year, the FSCA announced plans in December to prepare a regulatory framework on how crypto trading should be conducted. The framework is set to be unveiled early this year.

UPDATE: (Feb. 2, 14:35 UTC): Adds comment from Bybit spokesperson.

UPDATE: (Feb. 2, 15:05 UTC): Adds bullets on Sam Bankman-Fried's tweeted response.

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Jamie Crawley is a CoinDesk news reporter based in London.

CoinDesk - Unknown

Jamie Crawley is a CoinDesk news reporter based in London.