South African FSCA Warns against Growing Crypto Scams

South African financial markets regulator, the Financial Sector Conduct Authority (FSCA), has issued a fresh warning on Thursday against the growing cryptocurrency scams in the country.

“The FSCA is receiving a large number of complaints from South African investors who have lost their savings through investing in a crypto-related investment that they did not understand, or a scam packaged as a crypto investment promising unrealistic high returns,” the press release read.

This warning came after the country saw its largest Ponzi scheme pulled out by Mirror Trading International, which defrauded around 28,000 local and global investors. The company lured investors by promising a 10 percent monthly return on their investments and gathered around $644 million from victims.

Crypto Is Risky

The massive scam has rocked the South African regulatory stance for Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term. Additionally, the FSCA is reportedly thinking of regulating all digital currencies, including Bitcoin and Ethereum.

A governmental working group in the country last year also sought strict regulations on Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term.

“Crypto-related investments are not regulated by the FSCA or any other body in South Africa,” the warning stated. “As a result, if something goes wrong, you’re unlikely to get your money back and will have no recourse against anyone.”

Similar to other countries, retail crypto demand soared in South Africa.

The regulator is now pointing out the risks associated with these investments, particularly the various schemes.

“Investing in crypto assets, or investments and lending linked to them, generally involves taking very high risks with investors’ money, which means that you should be prepared to lose all of your money,” the regulator added.

“Crypto investment firms may be overstating potential pay-outs or understating the risks.”

Meanwhile, the tax department of the country is sending notices to the cryptocurrency traders, a trend seen across global tax agencies. It is seeking details like the reason for buying digital currencies, exchange details and also bank statements.