The South African Financial Services Conduct Authority is seeking to categorize digital currencies as a financial product after the massive $3.8 billion scam scare. FSCA categorizing digital currencies as the financial product would give it jurisdiction over the industry and allow it to protect investors who are becoming increasingly vulnerable to such scams. South Africa was victim to two of the biggest digital currency scams in the past year.
South Africa looks to tighten crypto regulations after increasing crypto scams.
South African regulators are looking to tighten crypto regulations after the country witnessed two major scams in the last year. The first digital currency scam was Mirror Trading International which reportedly took off with over $170 million of its customers. The latest one is the biggest one yet. As reported earlier, Africrypt reportedly took off with $3.8 billion, making it one of the largest scams in the history of digital currencies. However, Africrypt founders denied such claims. With investors becoming a target for scammers so often, the Financial Services Conduct Authority seeks to become more involved in the digital currency industry.
South African regulators ask investors to stay away from get-rich-quick schemes.
According to a report by IOL, the FSCA is looking to declare Bitcoin and the other cryptocurrencies as financial products. This will allow it to oversee the industry and protect investors. As the regulator strives to regulate the crypto industry, it’s asking investors to stay away from get-rich-quick schemes, be it in digital currencies or elsewhere. Almost all scammers promise unrealistically high returns to lure investors in to invest their hard-earned money, and this can be a good way to gauge which investment products are likely to be scams.