The South African Government is trying to prevent crypto crimes otherwise the country is becoming a house of crypto frauds. Already two major frauds in the country have taken place, the credit of which goes to MTI and the recent fraudster, Africrypt. Both are said to be the biggest scams that have happened in the South African lands. MTI is under liquidation while the trial relating to Africrypt is continuing. In both frauds, billions of dollars worth of cryptocurrencies have been either stolen or hacked. Prime suspects are either absconding or hiding.
South Africa has recorded several frauds and swindles in the past few months in cryptocurrency. All these acts seek the attention of the lawmaker. It was announced this week that strict laws are required to circumvent crypto frauds.
A new law committee formed recently has announced that a new framework will be concluded in next coming months. As per Prudential Authority, South Africa this matter will be handled on an urgent basis. Understanding the nature of crypto it was stated that it should be equally dealt with as other monetary products. The issue related to crypto fraud is considered market conduct and should be tackled wisely.
It was stated by Naido, an official representative that cryptocurrencies are an insecure currency. The financial sector should put in efforts to manage it safely. There are certain policies that were initially introduced regarding crypto security. The basic rule will be to get aware of your customer, and this will be the primary rule for crypto exchange.
While quoting all the fraudulent activities that occurred in past few years. It was stated that this currency was introduced to counter money laundering and terrorism financing. It was a unanimous thought that cryptocurrency does not fit with the current legal system. All the legal experts proposed multiple ideas to cater to the crime. There are various firms in South Africa that offer services relating to digital currencies.
While stating concern over the digital currency it was also stated that a complete uncheck was on service providers. This lack of surveillance amounts to numerous problems and can lead to big scams.
This was also recorded in an interview that Binance Market Ltd. was banned on Sunday. The purpose of this market being banned was due to poor surveillance of digital currency flow. This can be a global threat as well and to cater to this threat such a law is being introduced. As a matter of strategy, it was proposed that 1,250% risk weight will be applied to banks with digital currency such as Bitcoin. Soon a guideline and rules for maintaining capital risk in the bank sector will be introduced. This aid will scrutinize all the actions taking place concerning cryptocurrency.