South African regulators reportedly speeding up the crypto regulatory framework – regulating Bitcoin News

With South Africa getting more than its fair share of cryptocurrency-related scams, a report suggests that regulators are responding to this challenge by accelerating the process of creating a new regulatory framework. As a result, regulators now expect this process, which was preceded by “publication of proposals in early June”, to be completed “in three to six months”.

Acknowledge risks associated with crypto

According to a report, due to the requirements of the upcoming regulatory system, actors in the South African financial sector are expected to be aware of the risks associated with cryptocurrencies. They are also expected to appropriately factor in these risks.

Meanwhile, the report also quotes Kuben Naidoo, CEO of the Prudential Authority, a regulator for the banking sector, and explains how the drafting process is likely to develop. The CEO said:

We are trying to create the regulatory framework quickly. It is important to define this as a financial product and then develop the regulatory framework.

Defeat fraud through regulation

Meanwhile, South African regulators feel a sense of urgency on the issue as the country grapples with the Africrypt debacle, the latest high profile cryptocurrency investment platform to collapse.

As previously reported by Bitcoin.com News, Africrypt collapsed shortly after its directors Raees and Ameer Cajee fled with the BTC of investors who were initially believed to be worth billions. Since then, investors have been trying to locate and recover the missing BTC with the support of a South African law firm.

The spectacular collapse of Afriypt was preceded by the demise of Mirror Trading International (MTI) less than six months earlier. Just like Africrypt, MTI collapsed after its CEO Johann Steynberg disappeared with investor money. Since then, MTI investors have also been trying to get their funds back.

Naidoo, who is also the deputy governor of the South Africa Reserve Bank (SARB), unveils some of the first steps regulators are planning to avoid a repeat of the MTI and Africrypt type bitcoin investment scams. One of those steps, according to the report, will include setting up know-your-customer rules for crypto exchanges. In addition, exchanges are expected to “put in place systems to monitor the asset class to prevent money from being laundered out of the country”.

According to Naidoo, investor protection guidelines and rules for capital risk management in the banking sector will then come into force.

Do you think that creating a regulatory framework will be successful in ending the spread of bitcoin fraud in South Africa? Let us know what you think in the comments section below.

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