HomeHome SearchSearch MenuMenu Our productsOur products

Crypto is about to officially become regulated - here's what you need to know

by , 26 November 2020
Crypto is about to officially become regulated - here's what you need to know
For years now the Crypto asset space has been marred by companies like MIT, MMM Global and more. While there was nothing wrong with the asset class as such - the industry was like the wild west.

Until recently when there was a crypto scam, or investors were defrauded there was basically nothing to be done.

The SARB said that it did not regulate crypto currencies, and investors should contact the FSCA. The FSCA (Financial Services Conduct Authority) basically passed the buck to the Consumer Protection Commission. And in the end basically nothing was done.

But the FSCA has now released a draft declaration on crypto assets.

In this declaration it now formally deems crypto assets as “financial products”.

With this happening it means that anyone providing services or advice as per the FAIS act will have to be registered and authorised to do so.

Gone are the days of your estate agent or dentist running a crypto club - or your friend recruiting you into an ‘automated crypto trading platform' without it being regulated and legal.
________________________________________
 
 
From good to great in 2021 - An essential logistics provider that's paying one of the largest dividends on the JSE - whilst still growing its business year on year.
 
________________________________________
 
Regulation isn’t all bad – this will legitimize crypto
 
When investors put their money in crypto and forex platforms – my biggest warning always lies in the fact that these platforms aren’t regulated.
 
That means they don’t put your money into a segregated account. They don’t necessarily get audited. And an unscrupulous person behind such a platform could effectively run away with your hard-earned cash. There are legit platforms – like Luno for instance.
 
But for every one legit platform there is a scam and a number of very questionable opportunities as well.
 
With regulation now you will be assured that at the very least these platforms have to submit themselves to FSCA scrutiny.
 
That doesn’t mean there’s no risk.
 
But at least an initial screening has been done for you to ensure you’re putting your money into something legitimate.
 
New regulations will also aim to ensure anti-money laundering and counter terrorism financing regimes are put in place – something I’m sure you agree is a positive.
 
________________________________________
 
 
HOT UPDATE:
 
Did you miss ANOTHER triple-digit gain this last month?
 
Those canny Pickpocket Traders didn’t - this time a 111% gain from a trade.
 
And this isn’t a one-off lucky strike. Since the beginning of this year, Trader X and his followers have banked gains of 323% from the US500... 64% from Lloyds and 114% from Porsche!
 
 
________________________________________
 
As crypto becomes an ‘accepted’ asset class the opportunities could be massive
 
With crypto becoming a financial product and being regulated it would open the door for asset managers to trade in crypto as well.
 
Suddenly it won’t be a guess as to which platform is legit, and which is a scam.
 
Whilst I’ve spoken to crypto investors worried that this regulation is a negative – it is most likely the opposite.
 
Commenting on the proposed regulations, Jon Ovadia, founder and CEO of crypto company Ovex, says this will have a beneficial effect on the crypto sector.
 
“We’re not surprised by this, as we knew it was coming. We’re excited by it. A big hurdle for us is not being regulated by the FSCA, which has deterred many people from getting involved in this sector.”
 
Another CEO in the crypto market said that he thinks “regulations will help bring credibility to the crypto sector and help weed out those involved in crypto scams”.
 
According to an FA News article “Regulation will make way for crypto assets to be used properly in the financial system. Comments are open on the Declaration till 28 January 2021”. Richard Rattue, MD of Compli-Serve SA says that this brings “regulatory certainty to the growing crypto market” and that he “suspects that there will be a positive response given the growing need for transparency”.
          
Here’s to unleashing real value
 
Francois Joubert
Editor, Red Hot Penny Shares
 
P.S. Submissions on the draft Declaration must be made in writing on or before 28 January 2021 to the FSCA at FSCA.RFDStandards@fsca.co.za, using the submission template available on the FSCA’s website.


Crypto is about to officially become regulated - here's what you need to know
Rate this article    
Note: 4.58 of 6 votes

Related articles



Related articles




Trending Topics