Increasing use of crypto assets, including Bitcoin, has led regulators to take steps towards bringing them under South African regulation, providing investors with protection they don’t currently have. A position paper recently published by the Intergovernmental Fintech Working Group (IFWG) confirms that initial steps taken towards regulating the crypto space in 2014 will now be firmed up. The paper makes 25 recommendations for a phased-in regulatory approach. The IFWG is a joint initiative including the National Treasury, the Financial Sector Conduct Authority, the South African Reserve Bank, the South African Revenue Service and the Financial Intelligence Centre (FIC). One of the proposals is that crypto asset service providers must adhere to legislative requirements at combating money laundering and financing of terrorism. Service providers will have to register with the FIC, conduct customer identification, verification and due diligence, keep records of clients and transactions, monitor for suspicious and unusual activity, and report such transactions, including all cash transactions of U.S.$1,700 or more, to the FIC.
The increasing use of crypto assets, including Bitcoin, has led regulators to take steps towards bringing them under SA regulation, providing investors with protection they don’t currently have. A position paper recently published by the Intergovernmental Fintech Working Group (IFWG) confirms that initial steps taken towards regulating the crypto space in 2014 will now be firmed up. The paper makes 25 recommendations for a phased-in regulatory approach. The IFWG is a joint initiative including the National Treasury, the Financial Sector Conduct Authority, the South African Reserve Bank, the South African Revenue Service and the Financial Intelligence Centre (FIC). IFWG points out that the crypto-asset ecosystem has grown to include more than 10,000 unique crypto assets. “Global daily trading values have also increased significantly over the past few years, currently averaging in excess of $200-billion, and on some days exceeding $400-billion. While crypto assets’ viability as a widely used means of payment remains untested and an open question, the market has demonstrated significant resilience over the last decade.