South African regulator says it is “unable to take regulatory action” – regulating Bitcoin News

After the collapse of Africrypt, the South African regulator, the Financial Sector Conduct Authority (FSCA), issued a statement reiterating its lack of jurisdiction over cryptocurrencies. Although the regulator says it is “continuing to investigate complaints against the crypto-investment company,” it admits that it has only “found evidence of crypto-asset transactions.”

A large number of scams

While the FSCA says it is unable to take regulatory action, the regulator is using the global awareness of the Ponzi scheme in a statement released on June 24, 2021 to protect the public from the “high risk nature of investing in crypto Assets ”to warn.

Meanwhile, in addition to the FSCA’s concerns about the “suitability of crypto assets as an asset class” and volatility, the regulator expressed concern about “the large number of frauds committed by individuals claiming to be the crypto-asset To make available to the public ”. “According to the FSCA, many of the crypto investment companies are actually fraudulent operations that may be based outside of South Africa. The FSCA states:

Many of these companies (which we refer to as intermediaries) are often not based in South Africa or have insufficient security to protect the crypto-asset that is being acquired by the public and theoretically held on behalf of the customer. However, these intermediaries are often just fraudulent operators.

Although the regulator admits that the South African crypto asset sector “has a number of legitimate actors offering a legitimate service”, it urges investors to remain vigilant as there are “a great many unscrupulous actors in the sector”.

Africrypt takes over page from MTI Playbook

In its statement, the FSCA, which is currently considering declaring crypto assets a financial product, says it will “continue to update the public as more information about Africrypt becomes available”. The declaration also calls on investors to “always check whether a company or individual is registered with the FSCA in order to offer financial advisory and brokerage services”.

Just like Mirror Trading International (MTI), ranked by Chainalysis as the Biggest Bitcoin Scam in 2020, Africrypt collapsed after its directors disappeared with investor money. Like MTI, the end of Africrypt was preceded by a breach and subsequent freeze on withdrawals sometime in April 2021.

At the time, Africrypt directors Ameer Cajee and his brother Raees Cajee told investors the breach had compromised “customer accounts, wallets and nodes.” However, in anticipation of possible legal challenges, Directors cautioned customers not to take legal action as “doing so will only delay the recovery process.” Since the hack announcement, the Cajee brothers have disappeared, with local media speculating that they fled to the UK.

What do you think of the FSCA’s response to the collapse of Africrypt? You can share your views in the comments section below.

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