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South Africa's Regulatory Uncertainty Driving Away Crypto Startups: Report
A looming regulatory clampdown following a major Ponzi scheme's collapse is already prompting some exchanges to flee abroad.
Updated Sep 14, 2021, 12:24 p.m. Published Mar 11, 2021, 1:43 p.m.
Fear of a regulatory clampdown in South Africa is driving cryptocurrency startups to look to more friendly environments.
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- Some crypto exchanges have already made the decision to go, Bloomberg reported Monday.
- For example, Revix is shifting its head office to the U.K. and also planning a Germany-based location.
- The Financial Sector Conduct Authority (FSCA) is seeking to regulate cryptocurrencies with more power to prosecute fraudsters, Head of Enforcement Brandon Topham told Bloomberg in January.
- The looming changes come after the collapse of Mirror Trading Investments (MTI) in December 2020, which had collected over 23,000 bitcoin from investors before its CEO allegedly fled to Brazil.
- Regulators will focus on better protection for consumers rather than businesses, according to Topham, who added more proposals are expected in coming months.
- Until now, authorities in South Africa have been "incredibly slow in terms of regulation," according to Sean Sanders, CEO of Cape Town-based Revix.
- This stymies growth as customers "arrive at our platform with skepticism," he said.
See also: South Africa’s Tax Agency Is Clamping Down on Crypto Users: Report
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