July 24, 2024
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Proliferation Of Scams, Suffocates The Cryptocurrency Assets In South Africa, As Stricter Regulations Loom Over Them.

Johannesburg cityscape, taken late afternoon, showing the M1 highway. The old Newtown suburb in the foreground with the railway line leading to Park station under Nelson Mandela bridge.
Proliferation Of Scams, Suffocates The Cryptocurrency Assets In South Africa, As Stricter Regulations Loom Over Them
Johannesburg cityscape, taken late afternoon, showing the M1 highway. The old Newtown suburb in the foreground with the railway line leading to Park station under Nelson Mandela bridge.

Crypto-Scams Plaguing South Africa

An abundance of scams is taking place in such a short amount of time. This calls for a new and more regulated framework before this spreads even more like a wildfire. The new regulatory timeline plans on finalizing the framework in three to six months. However, only after a certain public approval process can this move forward.

Central Bank’s Statement

Deputy Governor of South Africa’s Central Bank, Kuben Naidoo, thinks that defining cryptocurrency assets as a financial product is important. Therefore developing the regulatory framework would be easier and more concise. This also means that tougher and more restrictive regulations should be expected. Especially after a $3.6 billion Bitcoin Ponzi scheme surfaced around just a few days ago.

Unregulated Operations

Until now, the South African Cryptocurrency providers performed their operations unchecked by regulations. Even after the popularity of such assets took off, their operations remained the same. This is one of the biggest reasons why scams plague the nation. Last year, the collapse of Johannesberg-based trading company, Mirror Trading International, was the biggest crypto-related scam of 2020.

Periphery To Center

Digital currencies are becoming a lot more mainstream and moving from the periphery to the absolute center. Due to this, Africa’s most developed economy, South Africa, is tightening screws so it would not spiral out of control. Cryptocurrency has also been facing global scrutiny in recent times. From the UK banning Binance to Huobi withdrawing from trading in China, the world is not just watching anymore.