Nonkumbulo Tshombe, an attorney for the Financial Advisory and Brokerage Ombudsman’s Office (FAIS), recently announced that her office had seen a significant increase in the number of complaints related to cryptocurrencies in fiscal year 2020/21.
Cryptocurrency not yet regulated
A lawyer for the South African Office of the Financial Services Ombudsman, Nonkumbulo Tshombe, recently announced that her organization had seen a significant increase in the number of crypto-related complaints in fiscal year 2020/21.
Despite such complaints, Tshombe is quoted in a report by Moneyweb stating that her organization cannot accept such requests because cryptocurrencies are not yet regulated.
“Crypto assets are not classified as a financial product, which means that the product does not fall under the jurisdiction of this office,” said the lawyer.
Although South Africa does not yet regulate cryptocurrencies, it has intervened through the Financial Sector Conduct Authority (FSCA) or enforced action against certain crypto companies or individuals. For example, to help Mirror Trading International (MTI) investors get their funds back, the FSCA took several steps, including raiding the house of one of the masterminds.
In addition, as reported by Bitcoin.com News, the FSCA has issued public warnings warning the public against dealing with certain cryptocurrency companies or their products. Such indications have already caused the global crypto exchange Binance to restrict its activities in South Africa.
Cryptocurrency as a financial product
As the Moneyweb report notes, South Africa could be on the verge of getting a regulatory framework for cryptocurrencies. To back up that claim, the report cites a statement by the FSCA in June that it was considering declaring cryptocurrencies a financial product.
According to Tshombe, it is this declaration that empowers the FSCA to regulate the advisory and mediating component of crypto assets. This statement will also allow her office to investigate complaints related to crypto assets, such as the 10,552 complaints it received in fiscal year 2020/21.
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