South African cryptocurrency companies have threatened to relocate their activities abroad if the legislature does not provide clear regulations for their local crypto companies.
South African Government too Slow on Crypto Regulation
Sean Sanders, CEO of Revix, a local cryptocurrency investment platform in an interview with Bloomberg, said the South African government is “extremely slow” in clarifying regulatory guidelines for the cryptocurrency industry and that there are plans to move its headquarters to the UK.
He said, “That leads to businesses looking internationally. In an unregulated environment, a customer arrives at our platform with skepticism, and rightfully so.” he stated
“South Africa seems to go in the opposite direction of some of the more developed market pioneers and innovators in this space. For regulators to apply hundred-year-old securities regulations to the novel cryptocurrency asset class seems lazy.” he further added
The South African cryptocurrency company claims that the country’s financial institutions are reluctant to provide banking services. Marius Reitz, the African general manager of the global cryptocurrency exchange Luno, warned that a clear bank embargo would hinder local acceptance:He said, “This makes it very difficult for customers to buy Bitcoin with their local fiat currency,”
Crypto scams on the increase in South Africa
The recent use of cryptocurrency by crooks to lure victims has also hampered adoption in South Africa. Last month, the South African Financial Sector Conduct Authority (FSCA) reported that the number of crypto scams is increasing in the current bull market. The FSCA warned investors in its February 4 bulletin:
“Do not be pressured to go with the flow, and do not be afraid of being left out of the next big thing.”
In January 2021, Fxcryptonews reported that the South African Ponzi program Mirror Trading International was allegedly temporarily wound up by regulators after receiving more than 23,000 bitcoins from investors.
The FSCA investigation found that the company did not keep accounting records or user databases. FSCA speculates that Mirror CEO Johann Steynberg may have fled to Brazil, preventing investors from withdrawing money.