In the wake of relentless crypto scams and fake ICO offerings across the continent, the South African Reserve Bank (SARB) has released a comprehensive report on various cryptocurrency aspects within the country.
The bank has also asked for public comments on the policy paper which outlines the risks and benefits associated with crypto assets, the regulatory approaches available around them and proposals for industry participants and stakeholders.
Nonetheless, in a bid to sidestep confusion, SARB has described the consultation paper’s core focus as ‘non-government or non-central-bank-issued crypto assets, and not on central bank cryptocurrencies.
No Ban, But Tighter Regulations
Recently, Ethereum Classic experienced a 51-percent attack, through which hackers were able to cart away more than USD 1 Mn. That compounded with Bitcoin’s across-Africa swindles has also urged regulators to warn investors against crypto-related scams. With the financial risk imped with these fake ventures, SARB has moved to strengthen the chain of regulations to protect the pockets South Africans.
“In order to achieve anti-money laundering/combating the financing of terrorism (AML -anti-money laundering/CFT – combating the financing of terrorism) requirements, more specific requirements will be necessary for the line with the recent amendments to the Financial Action Task Force (FATF) Recommendations,” the report said.
Rather than banning crypto, the bank simply proposes limited regulations. Having said that, the authorities are also focused on directing the specific responsibilities and the requirements to service providers of crypto assets.
“Therefore, in terms of the proposed level, the FIC (Financial Intelligence Centre) will include crypto assets service providers as an accountable institution and, as such, the accountable institutions will be under legal obligation to comply with AML/CFT requirements in the FIC Act.
While the paper is open for public appraisal until February 15, the recommendation is compiled by ‘Intergovernmental FinTech Working Group (IFWG) which involves the member of SARB and Treasury.
“Regulatory Working Group is of the view that regulatory action should not be delayed until the most appropriate regulatory approach has become clear, but to rather act and amend as innovation evolves.”
2014, the National Treasury warned the public about crypto-related risks as it concerns trading and investing. It iterated that there were no specific rules or regulations guiding digital currency use. This meant that there was no legal protection or recourse to users or investors.
Same year, the SARB released a position paper through the National Payment System Department. The report cited the risk surrounding crypto, such as money laundering and the financing of terrorism.
CSA’s BTC Scam
Cricket South Africa’s official Twitter account, which has more than 1 million followers, was compromised overnight by unknown scammers, last week. This heist resulted in multiple tweets which attempted to sell Bitcoin (BTC) lottery scam to CSA’s followers.
The tweets had claimed that CSA signed a partnership with UK-based crypto wallet Luno, where users could win 20 BTC ($70,900). The now deleted tweet included a Bitcoin address, where participants were urged to send Bitcoin to participate. The scam was active for around five hours.
Luno separately debunked the news, claiming not to have any partnership in place with the CSA for the token activity. “We distance ourselves from this tweet that is going around”, the firm stated. CSA also used a tweet to apologize to its followers who were affected by the overnight hack.
If SARB’s just-released reports are tailored to eradicate such crypto scams, then the bank couldn’t have done one better.
Featured Image: IOL