JSE ends the week firmer amid mixed international peers
Propagandists need to sort out Israeli atrocities against Palestinians before they deign to teach the ANC anything about human rights
Effect on struggling households expected to be short term, according to agricultural economist
Nomusa Dube-Ncube, Amanda Bani and Mbali Frazer were interviewed for the position of premier on Saturday
The airline has been in business rescue since July 2021
The reforms under way will attract much private investment, says minister in the presidency Mondli Gungubele
Transnet, Telkom and Eskom estimate that thieves and vandals cost them a total of R7bn a year due to metal theft
Catastrophe ‘miraculously avoided’, plant’s operator says, after Russian shells landed near spent nuclear fuel, ‘but miracles can’t last forever’
Every time All Black coach Ian Foster fronts the media, he presents it with denial, not truth and honest appraisal
The vehicle is available in a single model boasting top features, enhanced mechanicals and a refined drive
SA is moving with more urgency to stiffen oversight of cryptocurrency assets after a proliferation of scams.
A new regulatory timeline foresees finalising a framework in three to six months, after the publication of proposals earlier in June that requires public comment before approval, according to Kuben Naidoo, CEO of SA’s banking regulator known as the Prudential Authority.
“We are trying to put in place the regulatory framework quickly,” said Naidoo, who’s also a deputy governor of the SA Reserve Bank. “Our view is that crypto is a financial product and should be regulated as a financial product.”
The approach that’s taking shape means tougher rules could be imminent this year after a jolt of scandals that most recently included a suspected Ponzi scheme, which resulted in the disappearance of an estimated $3.6bn in bitcoin.
“Now we are defining this as a financial product and if there are scams where the public is being duped, given incorrect or false information, it is certainly a market conduct issue that should be taken seriously,” Naidoo said.
SA cryptocurrency service providers have been operating unchecked by regulatory powers even as the popularity of the asset class has taken off. In 2020, the collapse of Johannesburg-based Mirror Trading International was called the biggest crypto-related scam of 2020 by blockchain data platform Chainalysis.
“We are of the view that cryptocurrencies are risky and we want to ensure that the financial sector is aware of those risks and pricing for those risks properly,” Naidoo said.
SA is tightening the screws on the industry as digital currencies move from the periphery of the finance world to the mainstream and face deeper scrutiny worldwide.
In one of the most significant moves to date by a regulator amid a global crackdown, Binance Markets was banned on Sunday by the UK financial watchdog from doing any regulated business in the country. Huobi, one of the most popular cryptocurrency platforms in China, said on Monday that users in the country were prohibited from trading derivatives.
Under global regulators’ plans to ward off threats to financial stability from the volatile market, banks will face the toughest capital requirements for holdings in bitcoin. Earlier in June, the Basel Committee on Banking Supervision proposed that a 1,250% risk weight be applied to a bank’s exposure to bitcoin and certain other cryptocurrencies.
Regulators in SA will first move to establish know-your-customer rules for crypto exchanges and create systems for the surveillance of the asset class to prevent money being laundered out of the country, Naidoo said. Thereafter, investor-protection guidelines and rules for managing capital risk in the banking sector should come into effect.
Firms offering services related to digital currencies in SA have been eager for better rules to take shape and drive up trust in the asset class.
“Any incidents of fraud draw attention to the importance of regulation and we hope that the clear guidelines in SA — and globally — could lead to wider adoption by enhancing stability and trust in the market,” said Marius Reitz, GM in Africa for Luno.
“Regulations will also raise standards and barriers to entry and weed out bad actors or service providers with a low regard and capability to safeguard customer information and money,” Reitz said.
Bloomberg. More stories like this are available on bloomberg.com
Would you like to comment on this article? Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.