South Africa bans the transfer of locally acquired cryptocurrencies to foreign exchanges, criminals face prison sentences – regulation Bitcoin News

New reports from South Africa suggest that the transfer of locally acquired cryptocurrencies to overseas crypto exchanges is now subject to the country’s foreign exchange control regulations. As a result, transactions in which a person in South Africa acquires crypto assets and uses them to externalize “any right to capital” are considered a criminal offense.

Risk of imprisonment

According to a Mybroadband report, this reinterpretation of the country’s foreign exchange control regulations is included in the FAQ document recently published by the Intergovernmental Fintech Working Group (IFWG), a body of South African financial regulators. In the document, the regulators stated:

Foreign Exchange Control Ordinance 10 (1) (c) prohibits transactions in which capital or the right to capital is exported directly or indirectly from South Africa without the approval of the National Treasury.

The IFWG document adds that violating these regulations could face a fine of over $ 17,500 (rand 250,000) and potentially up to five years in prison.

South African stock exchanges are still studying the IFWG’s position paper

Meanwhile, the same report suggested that South African crypto exchanges are still studying the IFWG’s position paper, while others say they want to help regulators put the regulatory framework in place.

For example, Richard de Sousa, the CEO of Altcoin Trader, is quoted by Mybroadband as saying that his company is looking at the papers published by the IFWG and “considering many things”.

On the other hand, Marius Reitz, Lunos GM for Africa, said in the same publication that while his company “supports clear and market-friendly regulations for the crypto industry”, it is currently not clear “how this” [new regulation] is implemented and regulated. “

The head of Luno Africa also shared the advantages of a gradual implementation of regulations versus the early introduction of onerous regulations. He explained:

Taking a step-by-step approach to implementing regulation for the crypto industry in South Africa – starting with mandatory AML / KYC obligations – is a sensible approach that will help mitigate any potential negative effects of regulation.

New push against cryptos

As recently reported by Bitcoin.com News, the South African IFWG has published a position paper on crypto assets calling for their regulation. After the position paper was published, reports soon surfaced of financial institutions preventing customers from buying cryptocurrencies with credit cards.

An attempt to prevent local exchanges from transferring cryptocurrencies to overseas platforms seems to be the latest sign that South African regulators are now looking to curb privately issued digital currencies.

However, South African regulators are trying to censor cryptocurrency transactions by threatening to punish individuals and companies who transfer locally acquired crypto assets to foreign exchanges. It now remains to be seen whether these restrictions stifle crypto use or whether this forces traders to go underground, as Reitz warned.

Do you think the South African regulators will be able to stop the transfer of crypto assets to foreign platforms? Let us know what you think in the comments section below.

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