South Africa says digital assets are financial products

0

South Africa has taken a giant leap forward in Bitcoin regulation, with the country’s financial regulator declaring digital assets as financial products.

The Financial Sector Conduct Authority (FSCA) published a notice confirming that it had updated the country’s law on financial advice and intermediary services to include digital assets.

The FSCA defines a “cryptographic asset” as a “digital representation of value” that applies cryptographic techniques and uses distributed ledger technology (DLT). The agency said “crypto assets” were financial products.

Reporting is the crucial first step digital asset regulations in the country. Regulators will now be able to formulate and implement laws to govern the industry, including enforcing anti-money laundering programs and licensing Virtual Asset Service Providers (VASPs).

“This was the first legal step needed to bring the crypto asset industry into the South African legal framework,” commented Brent Petersen of digital asset trading platform Easy Crypto.

Marius Reitz, managing director for Africa at Luno Exchange, agrees. He further pointed out that the new classification will make it easier for investors to select qualified investment advisers.

“The licensing requirements that will flow from this classification will lead to high standards in the industry, particularly with regard to consumer protection, with potential investors easily able to identify suppliers who meet regulatory requirements. . Another key benefit is that it should enable financial advisors to formally advise their clients on crypto investments,” he said. Told Bloomberg.

South African digital asset investors have been pushing for regulations for years. The country’s appetite for digital assets has grown steadily, with some reports estimating that around 15% of the 61 million South Africans own at least one digital asset.

The country’s lax regulations have seen scam artists exploit this group of investors. Africrypt, a pyramid scheme designed by two brothers, got away with a report $3.6 billion, making it the biggest scam in the crypto industry in the country. Other notable scams include Mirror Trading International, a Ponzi scheme that allegedly defrauded $1.7 billion of investors in South Africa and beyond. In July, the CFTC filed fraud charges against operator MTI in what was the largest BTC-related case to date.

Watch: BSV Global Blockchain Convention panel, Blockchain in Africa

width=”562″ height=”315″ frameborder=”0″ allowfullscreen=”allowfullscreen”>

New to Bitcoin? Discover CoinGeek bitcoin for beginners section, the ultimate resource guide to learn about bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.

Share.

Comments are closed.