Key Takeaways
- South African Regulator (IFWG) releases report on crypto framework
- Citizens face penalties and jail time for making cross-border cryptocurrency transactions without permission from financial regulator
- Mixed reaction from Local Crypto Exchanges on new regulation
The report highlighted key takeaways from the recent financial framework released by the Inter Governmental financial agency (IFWG). Citizens are prohibited from making cross-border crypto transactions from local exchanges without obtaining permission from relevant financial authorities.
The document further stated that individuals and entities that flaunt the regulation could face a fine of 250,000 rand and up to 5 years of jail time depending on the severity of the crime. The new crypto regulation has caused mixed reactions in the South African blockchain community.
A major crypto exchange director revealed to Mybroadbrand that his company was exploring different aspects of the new framework. Luno chief Marius Reitz noted that although the company was in support of progressive regulations the latest crypto framework provides uncertainty with regards implementation.
In recent months, South Africa has moved towards regulating digital assets due to its growing popularity in the nation. IFWG released an initial report some weeks back regarding crypto regulation that caused a ripple effect in the financial sector. Several crypto users reported restrictions from their banks on their credit cards when trying to purchase crypto-assets from exchanges.
This latest proposal from the IFWG has not cleared the existing problems within the South African crypto industry. Prohibiting local exchanges from processing cross-border transactions is unlikely to censor the use of digital currencies in the country. However the threat of fines and jail time for offenders could be restrictive for the fast-growing crypto industry and prevent foreign exchanges from having localized.
Do you think South African regulators will succeed in preventing transfers of cryptocurrencies by citizens to foreign exchange platforms?
