South African Cypto Firm Exodus

South African Cypto Firm Exodus

Countries like Singapore and UK are rewriting rules to entice crypto firms as crypto currencies explodes into the retail sector.

In the space of a year, South Africa has been hit with two major cryptocurrency scams; MTI and the AfriCrypt customers lost billions of rands in investments. This in turn has caused a shake up among South African regulators which has sent alarm bells ringing at the current crypto currency exchanges who are waiting around to see how this pans out.

Digital Friendly Countries

Finance ‘friendly’ countries such as Singapore and the UK have addressed regulatory gaps by embracing the new age of digital currencies, rather than throwing the old financial book at the problem. South African exchanges are now relocating their headquarters due to the uncertainty at the way South African regulators perceive digital currencies.

Another frustration is the ability to market to potential customers and the limitations set on advertising. A Cape Town based company, Revix has chosen to shift its head-office to the UK and expanding to Germany. Luno, which is Africa’s largest digital currency platform has since registered in London and has an office in Singapore.

The Digital Future

Digital currencies are the future, moving from the edge of the financial sector toward the center. Mainstream companies like Elon Musk’s have adopted bitcoin by investing $1.5 billion in the major currency. Institution investment houses are now offering crypto currency bundles, and the likes of JP Morgan have come on board propelling further interest in the cryptocurrency sphere.

However, the Ponzi scams may have soured the interest in South Africa and may have caused irreparable damage to the fledgling cryptocurrency sector in South Africa. The regulators cannot use this opportunity to stifle the emergence of crypto currency, instead they should use it to their advantage by allowing it to flourish and provide new exciting employment opportunities for the new generation.

Banks Not Playing Ball

Banks unfortunately, due to the nature of unregulated and lack of financial framework are not able to provide assurances or assistance to exchanges and investors wanting to explore digital currency entrepreneurship. This frustrates the entire sector, since everyone is now playing a waiting game on the regulatory framework. Proposals are currently being developed, but as can be seen they have chosen a “lazy” view of digital currencies and preferred a rigid perspective to classify crypto currency as.

Let us hope that the regulatory framework has fluidity built into it as current exchanges, and entrepreneurs may take their intellectual property, money and digital assets to other countries who would accept them with arm arms.