The South African Central Bank, known as the Reserve Bank (SARB), is apparently going to impose new regulations for digital currencies and their use. This comes in an attempt to deter users from skipping currency controls.
The cryptonews first emerged from the local business oriented publication named Business Report which showed that on December 2, the SARB deputy governor Kuben Naidoo said that the new rules will be implemented in the first quarter of 2020, following a five year long series of consultations on this matter.
According to the statements from Naidoo, this follows a decision of FirstRand Bank which is one of the largest financial institutions in South Africa – ordered to discontinue providing banking services to digital currency exchanges in late November. At the time, FNB reportedly blamed regulatory uncertainty for the move.
As the South African Central Bank is ready to impose new regulations, the blockchain and crypto communities have already responded to the idea of further controls on crypto. According to the South African blockchain development community SA Crypto, the stance is as following:
“The implications of the Sarb clamping down on cryptocurrency use for the purpose of stricter capital controls are far-reaching and alarming.”
Meanwhile, cryptocurrencies have proved to be very popular in South Africa. Reports showed that 10.7% of the country residents owned crypto which is the highest in any country surveyed. The South African rand’s currency volatility, on the other hand, prompted consumers to seek protection for their money.
In addition to this, we can see that cross border payments are a contributing factor of crypto popularity in the country, especially knowing how remittances are often sent from countries like South Africa to 15 other countries on the continent in something known as the Southern African Development Community.
Meanwhile, members of BRICS (which include South Africa) discussed the creation of a new cryptocurrency in mid-November this year. At the event, it was said that:
“An efficiently operating BRICS payment system is capable of stimulating settlements in national currencies and ensuring the stability of settlements and investments between our countries, which form more than 20% of the global influx of foreign direct investment.”
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“As alleged in today’s action, the SEC seeks to hold Eyal and Shopin responsible for scamming innocent investors with false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile [...] Retail investors considering an investment in a digital asset that meets the definition of a security must be afforded the same truthful disclosures as in any traditional securities offering."Furthermore, he also told the public that Eyal lied about having forged partnerships with established retail outlets when in fact no such partnerships existed. The SEC also claims that Eyal misappropriated investor funds to pay for personal expenses. The SEC charges Shopin for this and the complaint clearly states:
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“Many of our Danish users have received these letters, Skat is asking for a full breakdown of all their transactions and asking them to fix all past reports as well. Filing tax on cryptocurrency trades is a difficult task as crypto traders usually hold several exchange accounts & wallets and freely transfer crypto between them, so there’s no easy way to figure out what the capital gains are for any particular trade.”Skat mostly focuses on the crypto consumers' transactions in 2018 when it confirmed it was identifying more than 2,700 individuals that owed taxes on their BTC gains. The agency intended to go after each one of the users that avoided their payment obligations. Skat stated at that time:
“If something does not match, we will contact them and ask for more information. However, how many people it is and what it may mean, it is still too early to say.”
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