In recent weeks, we’ve seen more talk about crypto in South Africa than ever before. There were Doges involved, an ex-South African space emperor and two Cajee’s that got away with billions. The latter included an extensive scam built on Africrypt — a local cryptocurrency trading platform that turned sour at the end. Now South African financial regulations need to consider this new form of currency.
Crypto, but all grown up
According to Bloomberg (via BusinessTech), the South African Prudential Authority (or, the banking regulator) has revealed that it will have a regulatory framework ready for the new currency in the upcoming months. Of course, it feels like a ‘too little, too late’ situation, but it’s about time proper regulations are drafted in SA regarding crypto trading.
Kuben Naidoo, chief executive officer of the Prudential Authority and deputy governor of the SA central bank details that proposals were drafted earlier in June, and these still have to go through a public comment stage before proper approval.
“We are trying to put in place the regulatory framework quickly,” says Naidoo. “Defining this as a financial product and then developing the regulatory framework is important.”
Thing is, trading crypto is all but new in South Africa, and exchanges and apps are appearing all over the place. Popular local trading apps like Luno and VALR have already amassed many local traders. The Africrypt scam is a situation that could’ve easily been dissuaded using proper regulations.
Remember Mirror Trading International? Bloomberg recalls its collapse as being the biggest crypto-related scam of 2020 by Chainalysis.