Reports of a crypto assets regulatory working group being established in South Africa hit the news earlier this month. The task force will be charged with investigating all topics related to cryptocurrencies and blockchain technologies, as well as developing a unified intergovernmental regulatory framework, according to Finance Minister Tito Mboweni.
“It’s clear that the African continent is interested in the crypto sphere, so it only makes sense that government officials begin to establish a rulebook for operations,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading technology that powers global equities, derivatives, and cryptocurrency exchanges.
“Ideally, governments will begin working together and agree upon a basic set of guidelines. The industry needs common-sense standardization. What it doesn’t need is 193 different rulebooks.”
The working group will include representatives from the Financial Intelligence Centre, Financial Sector Conduct Authority, Treasury, Reserve Bank and the SA Revenue Service. The Finance Minister said that he expected a final report to be released in 2019.
“Based on Mboweni’s commentary, clearly the government is trying to figure out the best way to treat taxation of profits from cryptocurrencies. However, South Africa has a real opportunity here to lead on issues faced by the industry. A deep dive into issues like money laundering may prove useful to other countries with a deep crypto footprint, including Ghana and Nigeria,” noted Gardner.
Earlier this year, in an attempt to bring responsible oversight and self-regulation to the industry, Modulus introduced a proprietary Surveillance & Risk Management Solution, utilizing machine learning to identify and, ultimately, enable cryptocurrency exchange administrators to bring an end to money laundering, abusive trading behaviour, and market manipulation.
“Right now, the industry is left to self-regulate. That’s left investors vulnerable. Some cryptocurrency exchanges utilize top shelf surveillance and risk management technology to protect their users, but others do little. The time for governments to step up is now,” explained Gardner.