With regards to the increasing interest in the crypto space in South Africa and, also the popular crypto scams having their roots in the country, the country’s Financial Sector Conduct Authority has issued new crypto regulations in South Africa that will further enhance investors’ protection in 2022.
These new set of rules will include guidelines on trading Ethereum, Litecoin, and XRP. For South Africa’s FSCA, cryptocurrencies are not currencies but digital assets.
The commissioner of FSCA, Unathi Kamlana, said the best advice he will offer retail investors is to follow the unfolding plans of the Reserve Bank of South Africa closely especially as it has to do with the Central Bank Digital Currency. Pending when the CBDC will be launched, the FSCA has concluded that cryptocurrencies are assets rather than being currencies. According to Kamlana, they are not a direct threat to the financial stability of the country.
The Interest of South Africans in Crypto
Based on a report from Luno, a global crypto exchange, about 15% of South Africans are holding crypto and another report from a survey conducted by Financial Mail increased the figure to 25%. In the survey, it was reported that an average retail investor in South Africa has been committing about ZAR 100 – ZAR 1000 (about $6 – $62) to the crypto market.
Also, about 42% of the total respondents that participated in the survey have huge concerns about the aspects of crypto that are not clear to them.
The Popular Global Crypto Scams that Originated from South Africa
One of these BTC Scams pulled from South Africa is the Africrypt Scam where the hackers made away with over $3.6 Billion. The company owned by two brothers, Ameer and Raees Cajee, was offering 10% ROI on every crypto investment.
Trying to investigate the matter, the Hanekom Attorneys of South Africa believe that the Cajee brothers were part of the syndicate. But after the incident, two mysterious individuals offered to resuscitate the company and help the investors get a percentage of their investments.
Another related crypto scam in the country is the alleged Ponzi scheme run by Mirror Trading International Company, where the company offered crazily huge ROI on BTC investments. However, it was reported that the transaction database was hacked by Anonymous ZA. In October 2020, the FSCA raided the company’s offices including the homes of two shareholders. Eventually, in December 2020, it was reported that the CEO disappeared.
The court eventually gave an order to liquidate the company’s assets in June 2021, and the liquidators gave an update on November 11, 2021. The assets liquidated were properties recovered from the company’s CEO, Johann Steynberg, and it was valued at ZAR 1.1 billion (approx. $68 million).
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