South Africa Proceeds With Proposed Regulation of Crypto Assets

The increasing use of crypto assets, including Bitcoin, has led regulators to take steps towards bringing them under South African regulation, providing investors with protection they don't currently have, writes Neesa Moodley for Daily Maverick.

A position paper recently published by the Intergovernmental Fintech Working Group (IFWG) confirms that initial steps taken towards regulating the crypto space in 2014 will now be firmed up. The paper makes 25 recommendations for a phased-in regulatory approach. The IFWG is a joint initiative including the National Treasury, the Financial Sector Conduct Authority, the South African Reserve Bank, the South African Revenue Service and the Financial Intelligence Centre (FIC).

One of the proposals is that crypto asset service providers must adhere to legislative requirements at combating money laundering and financing of terrorism. Service providers will have to register with the FIC, conduct customer identification, verification and due diligence, keep records of clients and transactions, monitor for suspicious and unusual activity, and report such transactions, including all cash transactions of U.S.$1,700 or more, to the FIC.