With the recent increase in cryptocurrency fraud, a top South African financial regulator is making plans to regulate all cryptocurrencies.
The Financial Sector Conduct Authority of South Africa (FSCA) which is the country’s top financial market provider is suggesting that all cryptocurrencies be regulated due to the recent attraction these assets are gaining. Even as these attractions are welcomed, they are causing a lot of fraudulent schemes in the country.
The South African financial regulator had made previous attempts to regulate cryptocurrencies, all of which were unsuccessful. The body claims the lack of regulation has paved way for more fraudulent activities which entice investors with promises of massive interest rates.
After several failed attempts to regulate cryptocurrency in the country, the FSCA is more concerned about cryptocurrency following the recent Ponzi scheme which is presently the largest Ponzi scheme in South Africa. About 28000 investors worldwide were defrauded of 23000 bitcoins which is worth a whopping $740 million. The investors were lured into the Ponzi scheme because the company, Mirror Trading International (MTI) promised its customers 10 percent returns on investing with them.
When the company was charged for liquidations last month by a South African court, there were no traces of fraud as the company never stored details of clients nor maintained any account books. No one knows the whereabouts of the company’s chief executive, Johann Steynberg as he had fled the country.
Presently, MTI is flagged by regulators in Canada and Texas for pulling out Ponzi schemes even without evidence of fraud. MTI’s management also came out to blame the departed chief executive, stating that they have lost their jurisdiction after also being deceived by Johann’s Ponzi scheme.
To avoid more of these scams, the South African financial regulator has vowed to work with the police to put people who are involved in fraudulent cryptocurrency practices to jai, according to FSCA’s head of enforcement, Brandon Topham.
This post was last modified on January 28, 2021 5:04 am
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