The biggest cryptocurrency fraud that took place in 2020 was a rude awakening for South Africa’s regulator and not everyone is waiting to see how it all plays out. As major financial hubs such as Singapore rewrite laws and regulations to entice crypto firms, and the United Kingdom government faces calls to start embracing virtual currencies, South Africa’s rapidly growing transactions say they are being forced to relocate their headquarters refers to speculation. About potential state regulation.

A lack of monitoring and restrictions on marketing to potential consumers are to blame for the dissatisfaction. Revix, a Cape-Town-based company that specializes in currency bundles, is relocating its headquarters to the United Kingdom and establishing a second site in Germany to support its expansion. Luno is Africa’s largest digital currency platform, with offices in London and Singapore.

In an interview, Sean Sanders who is a Revix Chief Executive Officer noted that South African regulators have been very sluggish in regards to regulation in the industry, and that leads to firms going overseas. In an unregulated environment, a consumer is entitled to be skeptical of their platform. With Elon Musks’ investing $1.5 billion and billionaire hedge-fund managers endorsing the currency, digital currencies are becoming increasingly popular on a daily basis. Bitcoin reached a high of more than $58,000 last month before reversing some of its gains, establishing itself as a hedge against inflation risk just as concerns about price pressures grow.

The recent year has been very important and challenging for the crypto-industry and the friendly regulatory framework in South Africa created a good environment for the companies to operate in the country. However, the lighter regulations resulted in troubles for not only brokerage companies that provide people with service, but for the crypto betting companies in South Africa who are now concerned about their activities as well. However, in a watershed moment for the sector, a suspected Ponzi scam in South Africa may have led investors to lose up to $1.2 billion in the world’s most renowned cryptocurrency.

Scam of the Year

Mirror Trading Holdings was put into contractionary territory and blockchain experts have since called it the world’s greatest crypto crime of the year. The company is said to have amassed over 23,000 bitcoin from investors, and its CEO is said to have gone to Brazil. Earle Loxton, CEO of Digital Currency Index, a company he founded with the help of former FirstRand Ltd. CEO Michael Jordaan stated that South Africa has a terrible history of pyramid and Ponzi scams, and crypto was the natural new structure for this. Regulation is welcomed by honest operations because it allows their clients to invest with trust, particularly at the organizational level.

South Africa may frustrate its entrepreneurs, but it is viewed as a forerunner in the industry in comparison to the rest of the continent since authorities and businesses are collaborating on suggestions. Plans to regulate the industry in Nigeria have been put on hold until operators create a bank account in the West African country. According to Brandon Topham, head of compliance at the Finance Sector in South Africa, the goal for South African authorities is to improve consumer rights rather than corporate security. In the next two months, he expects more offers.

Regulatory momentum

South Africa’s main banks have all endorsed regulatory attempts to establish a framework for crypto belongings, but their approaches to sector players are currently divided. Standard Bank Group Ltd has not prohibited crypto-asset businesses from all of the operations while FirstRnad’s first national bank has no financial connections with digital forex or dealers, according to emailed responses.

According to Sanders, South Africa’s crypto businesses find it difficult to remote on Facebook and Twitter since they are unregulated. As a result, their growth possibilities are hampered. The claims that the lack of policy has harmed South Africa’s revenue collection function, since relocating head offices necessitates paying tax in many nations.

According to Luno CEO Marius Reitz, the lack of a legislative framework had made it impossible for crypto platforms to maintain bank accounts. As a result, buyers will find it extremely difficult to purchase Bitcoin using their local fiat currency. There are indications that things are moving to the correct path. The regulator has issued draft regulations that would allow crypto assets to be classified as financial products. However, Sanders warns that doing so risks overlooking crypto’s novelty appeal.

South Africa appears to be going the other way as some of the more advanced market pioneers and innovators in this space. It appears that authorities are being laid by applying hundred-year-old securities laws to the innovative bitcoin asset class.