South Africa is taking crypto regulations more seriously.
Defaulters of the new regulation face up to two years in jail.
Recently, South Africa’s top financial regulator, the Financial Sector Conduct Authority (FSCA) proposed to regulate all digital currencies operating in the country due to the increased interest in the sector and because some fraudulent individuals are using these assets to perpetuate their illegal activities.
This agency is not the only one looking to crack down on the crypto industry in the country as the South African Revenue Service (SARS) has sent an auditing report to taxpayers in the country requesting them to declare their crypto transactions.
SARS proposes new crypto regulation
The auditing report raises questions of why the taxpayer was buying crypto assets and the agency is also demanding that the trading platforms confirm such crypto investments and provide other necessary information like bank statements to back up this trade.
Authorities in South Africa demand that all crypto related transactions be reported to the appropriate body regardless of if a cash balance is withdrawn from a trading platform or not. A taxpayer who fails to report such transactions would face litigation that could lead to conviction or payment of fines.
It has been argued that the new posture of the authorities on crypto regulations is a sign that they are now taking more interest in what happens in the crypto industry of the country.
FSCA’s proposed crypto regulation
South Africa’s FSCA had previously attempted to regulate the country’s crypto industry but it was unable to properly enforce the regulations. Due to this failure, the crypto market became littered with fraudulent schemes and reports of illegal activities being perpetuated with crypto assets were widespread.
One of such is the notorious Mirror Trading International (MTI) that successfully lured close to 28,000 unsuspecting investors into a crypto Ponzi scheme. The fraudsters were able to achieve this by promising their investors a high yield of upto 10 percent monthly return on their investments.
The severity of this fraud forced the hands of the government into making a more conscious and concerted effort towards taming the industry.