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Uganda set to buckle up on crypto regulation

TL;DR

TL;DR Breakdown

  • Authority calls for crypto regulation
  • Why crypto regulation is needed 

The Financial Intelligence Authority in Uganda has raised the alarm on the government to develop clear-cut regulations regarding cryptocurrencies in the country.

Local media in Uganda Daily Monitor reports that the FIA has asked the country’s finance ministry to develop a legal framework for cryptocurrency regulations in Uganda.

Executive director of the Financial Intelligence Authority, Sydney Asubo, called on the finance ministry to meet with stakeholders over the weekend. Asubo noted that crypto regulation is needed in Uganda because it has become a important as industry participants are not compliant to the agency’s licensing requirement.

This is after the FIA recently amended the country’s Anti-Money Laundering laws to include crypto exchanges and other virtual asset providers, or VASPs. However, the FIA director revealed that several VASPs continue to operate illegally, with only a few platforms electing to register with the AML watchdog.

The executive director notes that the FIA’s inability to maintain strict oversight on crypto exchanges and VASPs, in general, was a blow to the agency’s desire to regulating the country’s cryptocurrency sector.

“Virtual assets service providers are now in category 16 of the most vulnerable to terrorism financing and money laundering,” Asubo added.

Dunamiscoin behind Uganda Financial Intelligence Authority?

He added that outside money laundering, investment scams is another risk of the need for crypto regulations in Uganda. The Eastern Africa country has seen elaborate virtual currency investment scams as they have leveraged the technology’s popularity to market to victims.

In Uganda, more than 5,000 victims of Dunamiscoins, an alleged crypto scam, petitioned the government for losses incurred by investing in the purported Ponzi scheme.

Dunamiscoins Resources Limited had started a business in Masaka town in November 2019. Soon after starting the company starting supporting users on its digital currency network. However, within a month after opening the Masaka Town firm closed its door as it seems to have shut down for good. Notably, the employees were not aware of this and came to their office only to find it completely empty.

Those behind Dunamiscoin stood trial amid crackdowns by the government against cryptocurrency Ponzi schemes back in February 2020. The Dunamiscoin scammers made to the tune of $2.7 million with their scam.

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Muhaimin Olowoporoku

Muhaimin loves writing on crypto news aside from being a crypto enthusiast. He has a knack for analysing issues and updating people on what's happening around the globe. He believes that blockchain and cryptocurrency are the most useful systems of mutual trust ever devised.

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