Several South African crypto companies have warned that they will move abroad if local lawmakers won’t provide regulatory clarity to the domestic digital asset industry.
Sean Sanders, the CEO of local crypto investment platform Revix, is one that already put his mouth where his money is, as he announced his plans to relocate the head office to the United Kingdom. He described the government of South Africa as being “incredibly slow” when it comes to issuing clarifications for the regulation of the crypto industry.
“That leads to businesses looking internationally. In an unregulated environment, a customer arrives at our platform with skepticism, and rightfully so,” he commented, adding:
“South Africa seems to go in the opposite direction of some of the more developed market pioneers and innovators in this space. For regulators to apply hundred-year-old securities regulations to the novel cryptocurrency asset class seems lazy.”
Revix also has plans to open an additional office in Germany.
Crypto firms in South African claim that the financial institutions there aren’t willing to provide banking services to them. Marius Reitz, the African general manager of global crypto exchange Luno, has cautioned that the alleged banking embargo will only harm local adoption:
“This makes it very difficult for customers to buy Bitcoin with their local fiat currency,” he declared.
Are Scammers Taking Over?
To be fair, the adoption of crypto in South Africa has been harmed by a growing number of scammers in recent months. In February, South Africa’s Financial Sector Conduct Authority (FSCA) confirmed that the number of crypto scams in the country is rising as a result of the bullish market. In early February, FSCA issued a warning to investors:
“Do not be pressured to go with the flow and do not be afraid of being left out of the next big thing.”
In December 2020, Mirror Trading International, which is allegedly a Ponzi scheme that originated in South Africa, has been put into provisional liquidation by regulators after it had received over 23,000 Bitcoin from investors. FSCA investigated and discovered that the company didn’t have accounting records, nor did it keep a user database.