South Africa plans to tighten the cryptocurrency market in three to six months, Bloomberg has learned, citing Kuben Naidoo, Chief Executive of the Prudential Authority, South Africa's banking watchdog. Naidoo says the country is trying to put in place the regulatory framework quickly after the local market suffered a proliferation of scams.
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"Now we are defining this [cryptocurrency] as a financial product and if there are scams where the public is being duped, given incorrect or false information, it is certainly a market conduct issue that should be taken seriously," he added.
Naidoo emphasized the regulator wants to ensure that the financial sector is aware of "those risks and pricing for those risks properly." The Prudential Authority's rush comes after the local authorities said that the founders of Africrypto, Ameer and Raees Cajee, defrauded their users for $3.6 billion. The platform attracted investors by promising high returns that could reach 10% per day.
A Cape Town-based law firm has reportedly been hired by the investors, who have been unable to locate Africrypt's owners. In addition, the application has been lodged with the South African police special police unit "Hawks." The victims are appealing to crypto exchanges around the world in order to prevent them from being able to convert the cryptos to fiat money and withdraw the funds.
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