- Africrypt, an Africa-based crypto exchange, ran away with $3.6 billion in BTC in a scam
- The CEO of South Africa’s banking regulator (Prudential Authority) Kuben Naidoo is trying to put the regulatory framework in place
After the biggest scam that has ever happened in Africa in cryptocurrency, the government in the country is all set to make more tough regulations on crypto assets. In the past couple of years, there has been a series of crypto scams developed in the country including two of the biggest Bitcoin scams ever.
The first scam was reported in 2020 when Mirror Trading International, a crypto trader, collapsed which resulted in losses of about $1.2 billion in BTC. The next incident was reported just a few months back. Africrypt, an Africa-based crypto exchange, ran away with $3.6 billion in BTC in a scam that is regarded as the biggest scam in Bitcoin history.
After these scams came into the limelight, the regulators decided to tighten the crypto regulations in the country. The CEO of South Africa’s banking regulator (Prudential Authority) Kuben Naidoo is trying to put the regulatory framework in place.
Crypto regulations to finalise in 6 months
Naidoo is also the deputy governor of South Africa’s central bank. According to him, crypto is regarded as a financial product and it will be regulated like a financial product. He further reiterated that if the scams come to light again where the public is duped or given incorrect information, it will be dealt with serious consequences.
To curb such scams, the authority will imply the KYC rules for bitcoin exchanges. A digital asset tracking system will also be put in place to prevent money laundering. The regulators will also follow the investor protection guideline so that scams like Africrypt should not happen again.
The proposal was submitted by the regulators in June but they need a public comment for approval. The aim is to finalize the framework in a span of three to six months. Since the Africrypt scam appeared in the limelight, the two brothers have disappeared. As per the latest update, they recently fired their lawyers who were on the missing bitcoin case.
Naidoo is of the opinion that cryptocurrencies are risky and they want to ensure that the financial sector is aware of those risks and pricing for those risks properly. Africa is working towards placing regulations on time. Better rules will mean more stability and trust in the industry.