Poor regulation pushing South Africa’s crypto firms to relocate
The world’s biggest cryptocurrency scam of last year was a jolt to South Africa’s regulator — and not everyone will wait to see how it shakes out.
As major financial hubs like Singapore redraw legislation to lure crypto firms and with the U.K. government facing calls to embrace digital currencies, South Africa’s burgeoning exchanges say they are having to move headquarters abroad due to uncertainty over potential government regulation.
Behind the frustration is a lack of oversight and limits on marketing to potential customers. Revix, a Cape Town-based operator specializing in bundles of different coins, is shifting its head office to the U.K. and planning another location in Germany to fuel growth. Luno, Africa’s largest digital-currency platform, is registered in London and has a presence in Singapore.
South African authorities “have been incredibly slow in terms of regulation in the industry and that leads to businesses looking internationally,” Revix Chief Executive Officer Sean Sanders said in an interview. “In an unregulated environment, a customer arrives at our platform with skepticism, and rightfully so.”
Digital currencies are moving from the periphery of the finance world to the mainstream, with Elon Musk’s Tesla Inc. plowing $1.5 billion into Bitcoin and wealthy hedge-fund managers like Paul Tudor and Stanley Druckenmiller supporting the currency. The interest from institutional investors has propelled Bitcoin to a record of more than $58,000 last month before the token pared some of its gains, emerging as a hedge for inflation risk just as fears about price pressures escalate.
But in a watershed for the industry in South Africa, a suspected Ponzi scheme may have caused investors to lose as much as $1.2 billion worth of the most famous cryptocurrency…..read more
Source: Al Jazeera