Cryptocurrency firms are contemplating moving their headquarters overseas. That’s because South Africa’s crypto industry is plagued by inadequate regulation, government uncertainty, and frequent scams.
The world’s greatest bitcoin fraud was reported in South African media last year. However, a suspected Ponzi scam may have cost South African investors and dealers up to $1.2 billion in Bitcoin (Bitcoin). According to Blockchain researcher Chain analysis, the world’s largest crypto crime last year was a Mirror Trading Investment.
The CEO of the crypto business reportedly acquired over 23,000 Bitcoin from investors. While South Africa has a history of pyramid and Ponzi scams, crypto was the apparent new format that impacted South African merchants and investors, the paper adds Due to this deception, traders and investors lost faith in the market. South African officials have been slammed for their cryptocurrency strategy. They prioritize business above consumer protection, even if more regulatory initiatives are due before the end of the year. Due to the lack of development, significant crypto platform providers have called on the South African government to adequately regulate the industry.
Regulation has been sluggish. Many corporations won’t wait to see what happens. For example,
Singapore recently rewrote regulations to attract crypto businesses, and the UK government is under pressure to accept digital currencies. Several obstacles have hindered the growth of crypto enterprises in the nation. Mismanagement and restrictions on marketing to prospective clients are to blame.
Revix, a Cape Town-based operator that specializes in coin bundles, is moving its headquarters to the UK and wants to open another in Germany to support development. Also, Luno, Africa’s biggest digital currency platform, is based in London and Singapore. Regulation in the sector is delayed in South Africa, which causes enterprises to turn elsewhere.
Revix CEO Sean Sanders told local reporters. Customers approach our platform with distrust in an uncontrolled environment. Michael Jordan, FirstRand. Regulation, particularly institutional regulation,
allows customers to invest with confidence. While South African regulators and business are working together to develop recommendations, it is considered as a step ahead of the rest of the continent.
While digital currency goes from the fringes of finance to the mainstream, major names like Elon Musk’s Tesla Inc and billionaire hedge fund managers like Paul Tudor Stanley Druckenmiller are embracing it. A record high of almost $58,000 has been reached due to institutional investor interest. Regulatory initiatives in Nigeria, for example, have been halted. Despite the banks’ restriction from processing crypto-related transactions, the authorities intends to protect its citizens’ funds. While global banks have unanimously embraced regulatory efforts to build a framework for crypto assets, regulators in South Africa have divided industry participants.
Unregulated South African crypto businesses struggle to promote on Facebook and Twitter,
limiting their development opportunities. The absence of rules also affects South Africa’s income collection, since changing headquarters involves paying tax in many countries. In the absence of a regulatory framework, crypto platforms struggle to get bank accounts. It makes it tough to acquire Bitcoin using fiat currencies. As said, there is a claim that the SEC has released draft guidelines to classify crypto assets as financial products. But other analysts think it risks neglecting crypto’s novelty appeal.
Says Some of the more established market pioneers and innovators in this field appear to oppose South Africa. It seems sloppy to apply 100-year-old securities legislation to new cryptocurrency. Given the massive cryptocurrency (Bitcoin) growth in Africa, the South African regulatory authorities takes a brief look at the industry.