Cryptocurrency Regulation battle Intense In Africa, Regulators Pin Down Suspicious Cryptocurrency Projects

Cryptocurrency craze among African audience is at its peak but 2019 might see many African countries imposing cryptocurrency regulations. The latest report released on January 03, 2019 indicates the initiative of ‘Africa’s new regulatory working group’ created to find out the potentials of blockchain and cryptocurrencies within the nation.

Regulators keen to impose cryptocurrency regulations in Africa

Consequently, on January 07, 2019, an African local media ‘IT Web Africa’ unveiled the upcoming plans of ‘Capital Markets Authority of Kenya (CMA). According to the reports, CMA cautioned public over ‘KeniCoin crypto tokens and crypto trading in Kenya’. KeniCoin is a digital token launched in July 2018 and has promised to provide 10 percent monthly returns on investment to the users.

CMA warns crypto enthusiasts in Kenya ‘to be caution in dealing with such firm’ and as such, the regulatory body is investigating ‘Wiseman Talent Ventures’, the ‘company behind the KeniCoin crypto tokens’. After the viable investigation, Wiseman Talent Ventures is quiet and has not discussed anything on the claims.

Also called as Capital Markets Authority, the CMA is an independent governmental body, supervising, licensing and monitoring the market activities. Addressing KeniCoin trade nature, CMA counseled that;

Further, the Capital Markets Authority has noted discrepancies in the information provided in the website and the information given to the authority during interviews of Wiseman Talent Ventures leadership in relation to the total number of Kenicoin sold and the total funds raised. CMA is currently investigating the operations of Wiseman Talent Ventures.

Many African countries including South Africa are part of Financial Action Task Force(FATF), a group of 37 countries, which is planning to formulate governing rules and guidelines to govern cryptocurrency exchanges. It will principally make sure effective countermeasures are in place to prevent activities such as money laundering and terrorist funding, according to a Japanese government official familiar with the matter.

Status of Cryptocurrency regulations in Africa

  • March 2018 – Central Bank of Kenya warned general public over-investment in Bitcoin and other cryptos
  • May 2018 – South African Reserve Bank called digital currencies as ‘cyber –tokens’
  • CMA sent out ‘caution notice’ to all crypto investors’ citing global market volatility
  • January 2019 – South Africa’s revenue service urged to amend ‘tax return forms’ to add cryptocurrencies as a better approach to impose cryptocurrency regulations
  • Africa’s government announces the initiation of ‘unified inter-governmental regulatory framework’
  • January 2019 – Capital Markets Authority (CMA) cautions public over KeniCoin and subsequent crypto trading in Kenya

Finance minister Tito Mboweni responded to the question of local African media that the cryptocurrency regulations in South Africa are likely to subject under tax consideration. He said that’

“Taxpayers who have made some form of declarations regarding cryptocurrency trades have captured such trade as a form of ‘other trade income’ or ‘other trade loss’, and have made reference to a description of digital/cryptocurrency trading (e.g. Bitcoin Cash, Litecoin (LTC), Ethereum (ETH), Zcash (ZEC) to name a few).”

Africa is bird’s nest for many successful cryptocurrency projects and the future of cryptocurrency depends on the nature of regulations that will be imposed on cryptocurrency project by African countries.

Author: Tabassum
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