South Africa’s financial regulator plans to introduce framework aimed at protecting vulnerable crypto investors: Report

South Africa's financial regulator plans to introduce framework aimed at protecting vulnerable crypto investors: Report

Unathi Kamlana is the South African Financial Sector Conduct Authority’s commissioner. He reportedly stated that the government’s rollout a crypto framework would help to mitigate any potential risks.

According to Bloomberg’s Friday report, Kamlana stated that the financial regulator would present a regulatory framework in 2022 to protect investors against “potentially high-risk” crypto assets. According to the commissioner, any crypto framework would be developed in coordination with South African Reserve Bank’s Prudential Authority (Financial Surveillance Board) and South African Reserve Bank’s Prudential Authority.

Kamlana stated, “What we want is to be able intervene when potential customers think that products they are given aren’t understood and potentially high risk.” “We have to be careful not to legitimize them.”

Following South Africa’s Intergovernmental Finance Working Group’s June announcement that it would be laying groundwork for a “phased, structured” regulation of cryptocurrencies in South Africa, the FSCA commissioner made the comments. While the African nation has generally opted to not interfere with crypto, it also warned the public about the lack of protection and recourse available from the government in the event of fraud or scams.

The FSCA refused to take any action after the founder of South African cryptocurrency investment platform AfriCrypt disappeared with billions of user funds. Binance, a major crypto exchange, also challenged the authority of the FSCA as South Africa’s financial regulator. Binance argued that the Financial Intelligence Centre in South Africa ensured that crypto firms are compliant with local laws.

Related: South African Asset Manager Denies Stealing Billions from Users, Claims $5M Was Lost in Hack

The South African Reserve Bank started an exploratory study in May on the rollout of a central bank digital currency (or CBDC) to its banks. To test international settlements using CBDCs, the central bank is part of a pilot program that includes counterparts in Australia, Singapore and Malaysia.

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