According to a Bloomberg report, The Financial Sector Conduct Authority (FSCA), South Africa’s top financial market regulator, is proposing to regulate all cryptocurrencies following the growing interest in such assets and the rampant fraudulent schemes. The market watchdog already made proposals earlier to bring regulations to the cryptocurrency market, but none of those earlier attempts materialize. As a result, the crypto market continued to be unregulated, spawning many fraudsters luring investors with promises of high-interest rates.
The attempt to regulate the crypto industry came after a $740 million crypto Ponzi scheme.
The latest attempt to regulate the crypto market in South Africa came after the notorious Mirror Trading International (MTI) defrauded around 28,000 investors, becoming South Africa’s largest Ponzi scheme. The massive crypto Ponzi scheme collected around 23,000 Bitcoins, now worth around $740 million from investors worldwide. The scheme made extremely lucrative offers like at least a 10 percent monthly return on investments. Last month, a South African court granted a provisional liquidation order against MTI, but the revelation made the liquidators was also shocking. The crypto company did not maintain any books of its accounts, neither did it keep details of its clients.
The Ponzi scheme’s mastermind fled the country.
The Ponzi scheme’s mastermind and chief executive, Johann Steynberg, fled the country, and no one now knows his whereabouts. MTI’s management also pulled the blame on Steynberg, saying he misled them. At the point something becomes a Ponzi scheme, we have lost our jurisdiction,” FSCA enforcement head Brandon Topham told the publication. “We need the police and the prosecuting authority to work fast and put people in jail.” Before the South African government’s warning against MTI, regulators in Texas and Canada had already flagged the company for pulling out Ponzi schemes.