Communism: South Africa’s plan to regulate cryptocurrency – My Comments
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Video: 50 Years of Race War in southern Africa presented by Jan in Canada
This lecture is JAM PACKED with tons of facts about us Whites in southern Africa and the wars we fought against Black Communists and AGAINST BLACK RULE. We did NOT want to be ruled by Blacks.In this lecture, I show photos and also videos about many of the key things that happened between us and the Blacks. This is primarily a presentation of how we fought wars over decades, even though there were only a few of us.
[Whites are the most active on the crypto markets. This is going to piss whites off. Sadly, the number of whites in it are not that many, but definitely whites are at work the most on the cryptos. So this will be an annoyance to those who are. Jan]
Those offering investments in crypto assets will need to register as investment funds if the proposals are adopted. Image: Shutterstock
One of the most important outcomes of the proposals to build a regulatory framework to oversee investments in and transactions using cryptocurrencies is that it will remove anonymous and secretive transactions.
Secondly, it will also remove the anonymity of entities that provide any service, platform and investment opportunities or issue and offer cryptocurrencies.
It seems that South African authorities took a simple view of the difficulties in regulating this new, ever-changing and evolving asset:
If the proponents of cryptocurrencies maintain that it is the money of the future, let’s treat it like money, and treat anybody who deals with its exchange and investment as financial service providers.
The Interdepartmental Fintech Working Group (IFWG) – comprising the SA Reserve Bank, the Financial Sector Conduct Authority (FSCA), National Credit Regulator, National Treasury, the SA Revenue Service and Financial Intelligence Centre (FIC) – has just released a draft of its policy position paper on crypto assets.
Removing the ‘excuse’
The working group says the purpose of the paper is to provide specific recommendations for the development of a regulatory framework for crypto assets, including suggestions on the changes to existing regulations to include cryptocurrencies.
That would solve the basic problem: at the moment anybody who tries to do anything can use the fact that there is no legislation regulating crypto assets and transactions as an excuse.
While cryptocurrencies are popular because they are not issued by a government or regulated by any governmental authority, regulation was bound to follow to ensure that any crypto network doesn’t become a haven for criminals.
The IFWG paper mentions money laundering or criminal activity, unmonitored cross-border flow, tax evasion, and the financing of terrorism as the main problems facing regulators.
In short, the working paper suggests that all participants in the industry be regarded as crypto asset service providers (Casps) and need to register as such.
This includes trading platforms, providers of vending machines, issuers of cryptocurrencies or tokens, providers of investments or derivatives of crypto assets, digital wallet providers and providers of custody services.
A recommendation proposes an amendment of the Financial Intelligence Act to include all these entities as accountable institutions. This would require registration of these businesses and compliance to all the provisions of the act.
Specifics
According to the IFWG paper: “This will include conducting customer identification and verification, conducting customer due diligence, keeping records, monitoring for suspicious and unusual activity on an ongoing basis, reporting to the FIC [Financial Intelligence Centre] any suspicious and unusual transactions, reporting cash transactions of R25 000 and above (or the applicable threshold at any given time), and reporting in respect of control of property that might be linked to terrorist activity or terrorist organisations.”
Other obligations will include developing and implementing a risk management compliance programme to ensure compliance with the act and training employees to that effect.
Another recommendation calls for an amendment to the Financial Sector Services Act to include entities involved in the crypto market as a financial service, with the result that every Casp needs to comply with the FSCA regulations.
The FSCA will be tasked with enforcement in much the same way it regulates and enforces rules controlling an investment manager.
Recommendations 11 to 18 of the policy paper deal with crypto assets as a currency, with the IFWG seemingly taking the approach of treating it like any other foreign currency. The Reserve Bank is tasked with asking the finance minister to amend the applicable exchange control regulations to include cryptocurrencies.
This small change will require dealers facilitating cryptocurrency trading to register as authorised foreign currency dealers and adhere to the same rules as an authorised dealer dealing in pound, dollar, euro, yen or kwacha.
Cross-border and offshore
These regulations include the reporting of cross-border transactions using cryptocurrency, as well as the transfer of rands or other currencies offshore to buy the digital currencies. A specific balance of payments category will be created to report crypto asset transactions.
The IFWG proposes that the issue of new cryptocurrencies through a so-called initial coin offering should be treated similar to the issue of (unlisted) shares and over-the-counter financial instruments. This would put initial and new coin offerings under the umbrella of the Financial Markets Act.
Thus, any entity that wants to issue new crypto assets to SA citizens would be required to prepare a detailed prospectus.
“The document should set out specific requirements and details on disclosures about the company, a governance plan, any agreements between the customers and ICO [initial coin offering] issuer, comprehensive independent audits and specific reports (to be confirmed) to regulators,” states the position paper.
Reframing
The working group also looked at the issue of regulating funds that invest in crypto assets. Once again, it proposes the use of existing legislation. It was recommended that the pooling of crypto assets be regarded as constituting an alternative investment fund.
This means that entities and individuals that offer investment in crypto assets will need to register as investment funds. It also means that existing alternative investment funds will be able to include crypto assets in their portfolios.
The implementation of the recommendations of the policy paper – a total of 30 – will have far-reaching effects on cryptocurrencies.
It will bring a host of regulations to an industry that prides itself on being outside the traditional regulated financial markets, necessary to curb criminal activity.
Source: https://www.moneyweb.co.za/news/south-africa/sas-plan-to-regulate-cryptocurrency/
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