New regulations in South Africa assessed by crypto experts banner

New regulations in South Africa assessed by crypto experts

On February 23, 2022, the Republic of South Africa’s National Treasury published its Budget Review for 2022 including certain regulations relating to cryptocurrencies. In the said report, they have mentioned that all rules about these digital assets will be finalized this year. On that note, crypto experts voiced their opinions to crypto news site Cointelegraph regarding the pros and cons of the mentioned legislation.

As found on various amendments to the crypto laws in South Africa, it showed that service providers will be noted as accountable institutions. The country’s treasury report highlighted that ‘any person providing advice or intermediary services related to crypto-assets must be recognized as a financial services provider under the act and must comply with the act’s requirements’. 

According to them, this move was done to address ‘significant weaknesses in the country’s anti-money laundering and counter-financing of terrorism systems’ that were found by the Financial Action Task Force (FATF).

Marius Reitz, the general manager for the South Africa branch of crypto exchange Luno, stated that these changes are a crucial part of the cryptocurrency ecosystem. He said to Cointelegraph last March 3 that, ‘regulation will make it easier for the public to distinguish between licensed and unlicensed crypto service providers and find a safe place to store and buy their cryptocurrencies’.

Meanwhile, Hermann Vivier, the founder of a South African Bitcoin Beach-inspired project Bitcoin Ekasi, noted that these new rules ‘push already marginalized people even further towards the margins of society’. Moreover, he also said that ‘authorities tend to approach the situation with a one-size-fits-all solution, which for many, turns out not to be a solution at all’.

In an interview with Cointelegraph, Vivier stated, ‘Ideally, there should be a threshold where people who earn below a certain level require zero compliance/verification, because really, if, for example, that threshold was at R5,000/month, what possible harm can a person do with that amount?’

However, the new tightened restrictions of the Treasury regarding ‘money laundering and terror risk financing controls through crypto assets’ is not a big surprise for many local crypto experts. Previously, the South African government has warned large exchange sites like Binance to not operate in their country.

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