The South African Financial Sector Conduct Authority (FSCA) issued two statements today, warning citizens against trading in the FTX and Bybit exchanges. It stated that these exchanges were not authorised to give financial advice or intermediary services in South Africa.
Across the world regulators in other jurisdictions are also urging caution, while some have even taken up incredibly negative stances towards cryptocurrencies. It may be imagined that most will really struggle to understand the intricacies of crypto, so their suspicion is probably understandable.
The regulator added that ByBit was already offering derivative instruments to South African customers, while it believed that FTX could be preparing to do the same.
According to a Bloomberg article published today, the South African regulator could be reacting to two of the world’s biggest crypto fraud cases that originated in the country, where billions of dollars in bitcoin were believed to have been stolen.
However, the typical ‘shoot first and ask questions later’ policy of so many of the world’s regulators appears to also be prevalent inside South Africa’s regulatory body. It’s rather worrying, that professional bodies such as this are still on first base with trying to understand what is going on, while cryptocurrency technology is innovating with such speed.
ByBit has responded to the FSCA, stating that it is ready to apply for the authorisation necessary to be able to give financial advice and also to offer intermediary services.
FTX has not yet responded but it can be imagined that given its aim to be the most heavily regulated crypto exchange on the planet, it will surely bend over backwards in order to accommodate the wishes of the FSCA.
According to Chainalysis, the South African market for cryptocurrencies has grown 1200%, from mid 2020 to mid 2021, amounting to more than $105 billion.
The FSCA recognises the need for regulation and it has said that it is looking at establishing rules on how ethereum, XRP, and Litecoin can be traded.
This really is the very tip of the iceberg though, so it is hoped that the authority will hire crypto experts that can help it navigate its way through the many facets of the crypto industry such as DeFi, NFTs, and Web 3.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
