South Africa working on stricter laws for Bitcoin and other cryptocurrencies after high-profile scams

South Africa is moving with more urgency to stiffen oversight of cryptocurrency assets after a proliferation of scams.

A new regulatory timeline foresees finalizing a framework in three to six months, after the publication of proposals earlier in June that requires public comment before approval, according to Kuben Naidoo, chief executive officer of South Africa’s banking regulator known as the Prudential Authority.

“We are trying to put in place the regulatory framework quickly,” said Naidoo, who’s also a deputy governor of the South African central bank.

“Defining this as a financial product and then developing the regulatory framework is important.”

The approach that’s taking shape means tougher rules could be imminent this year after a jolt of scandals that most recently included a suspected Ponzi scheme, which resulted in the disappearance of an estimated $3.6 billion (R51 billion) in Bitcoin.

South African cryptocurrency service providers have been operating unchecked by regulatory powers even as the popularity of the asset class has taken off.

Last year, the collapse of Johannesburg-based Mirror Trading International was called the biggest crypto-related scam of 2020 by blockchain data platform Chainalysis.


Read: South Africa faces a speed bump: SARB

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South Africa working on stricter laws for Bitcoin and other cryptocurrencies after high-profile scams