Crypto Regulations: South Africa to Regulate Digital Assets

Crypto regulations: South Africa to regulate digital assets

TL;DR Breakdown

  • South Africa’s top financial regulator looks to regulate all digital assets.
  • MTI scammed around 28,000 investors in one of the largest crypto Ponzi schemes in the world.

According to a report by Bloomberg, the top financial regulator in South Africa, the Financial Sector Conduct Authority (FSCA), has raised a proposition that would see it regulate all digital currencies operating in the country. The authorities have cited the growing interest in the sector and the possibility of using these assets for fraudulent activities because it is looking to regulate them.

The FSCA has tried to regulate the industry in previous times, but its attempt fell on its face. Due to these failed attempts, the country’s crypto market had grown wild, with different fraudsters initiating schemes that defraud unsuspecting investors. The authorities believe that the rise of these schemes is due to the lack of regulation for the crypto industry.

South Africa’s largest crypto scam

South Africa recently recorded one of the largest crypto scams in its history with the notorious Mirror Trading International (MTI) that successfully lured close to 28,000 unsuspecting into a Ponzi scheme.

The fraudsters achieved this by promising their investors a high yield r of a 10 percent monthly return on their investments. This way, the fraudulent firm collected over 20,000 BTCs that are now worth well over $700 million.

Authorities in Texas and Canada had also flagged the MTI company for perpetrating different Ponzi schemes.

South African Court makes shocking revelation

A South African court has discovered that the management of the MTI did not keep any records of its investors, nor did they keep account of the investments. According to the court, the company only had 170,000 unique email addresses recovered in a raid.

The court has, however, given the company a provisional liquidation order. 

It should be noted that the company’s management heaps the blame on its Chief Executive, Johann Steynberg, who is also the brain behind the scheme. The management claims he misled them. Currently, Steynberg’s whereabouts remain unknown as he has fled the country.

 

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