Nonkumbulo Tshombe, an advocate for the Financial Advisory and Intermediary Services (FAIS) Ombudsman, recently revealed that her office has noticed a significant increase in the number of cryptocurrency-related complaints in the 2020/21 fiscal year.

Cryptocurrency has not yet been regulated

Nonkumbulo Tshombe, an advocate for the Office of the Ombudsman of the South African Financial Services Sector, recently revealed that her organization has recorded a significant increase in the number of crypto-related complaints recorded in the 2020/21 fiscal year.

Despite receiving such complaints, Tshombe was quoted in Report Moneyweb explained that her organization cannot accept such inquiries because cryptocurrencies are not yet regulated.

“Encrypted assets are not financial products, which means that the product does not fall under the jurisdiction of the office,” the advocate explained.

Although South Africa has not yet regulated cryptocurrencies, it has intervened or forced actions against certain cryptographic entities or individuals through the Financial Sector Conduct Authority (FSCA).For example, to help investors of Mirror Trading International (MTI) recover their funds, FSCA has taken several steps, including Raid The home of one of the masterminds.

In addition, as reported by Bitcoin.com News, the FSCA issued a public consultation to warn the public not to deal with certain cryptocurrency entities or their products. Such advice has prompted Binance, a global cryptocurrency exchange reduce Its activities in South Africa.

Cryptocurrency as a financial product

As the Moneyweb report points out, South Africa may be about to obtain a regulatory framework for cryptocurrencies. To support this claim, the report pointed to a statement issued by the FSCA in June indicating that it is considering declaring cryptocurrency as a financial product.

According to Tshombe, it is this statement that will authorize the FSCA to regulate the consulting and intermediary parts of encrypted assets. In addition, the statement will enable her office to investigate complaints related to crypto assets, such as 10,552 complaints received in the 2020/21 fiscal year.

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Terence Zinwara

Terence Zimwara is an award-winning journalist, writer and writer in Zimbabwe. He has written a large number of articles about the economic difficulties of some African countries and how digital currencies can provide a way out for Africans.