Another government not happy with crypto being used to circumvent currency controls.
mybroadband.co.za
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The South African Reserve Bank and other regulators have warned that it is a criminal offence to transfer cryptocurrency bought on a local exchange to one located outside the country.
Regulators issued the warning through the Intergovernmental Fintech Working Group (IFWG), which recently published an FAQ document as part of its position paper on crypto assets.
The IFWG is comprised of the Competition Commission, Financial Intelligence Centre, Financial Sector Conduct Authority, National Credit Regulator, National Treasury, the South African Revenue Service, and the South African Reserve Bank.
“Exchange Control Regulation 10(1)(c) prohibits transactions where capital or the right to capital is, without permission from National Treasury, directly or indirectly exported from South Africa,” the FAQ from the IFWG states.
It added that this includes transactions where an individual purchases crypto assets in South Africa and uses them to externalise “any right to capital”.
The document goes on to warn that breaking these regulations is a criminal offence.
Contravening South Africa’s exchange control regulations carries a penalty of a R250,000 fine and possibly up to five years imprisonment.
The fine may be increased up to the value of the offending transaction under certain circumstances. However, the regulations specifically link this escalation to “any security, foreign currency, gold, bank-note, cheque, postal order, bill, note, debt, payment or goods”.
MyBroadband contacted South Africa’s three major crypto asset exchanges for comment, but none of them wished to directly address the challenges this pronouncement might cause for them.
Both Luno and Altcoin Trader offer services that allow clients to earn interest on some of the cryptocurrency they hold on their respective platforms.
These products rely on offshore partners to function and it is unclear how the decrees from the SARB and IFWG affect such services.
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Transferring Bitcoin from Luno to overseas exchanges is a crime
Existing exchange control regulations in South Africa make it a criminal offence to transfer cryptocurrency from local exchanges to offshore ones, authorities have warned.
mybroadband.co.za
---- start quote
The South African Reserve Bank and other regulators have warned that it is a criminal offence to transfer cryptocurrency bought on a local exchange to one located outside the country.
Regulators issued the warning through the Intergovernmental Fintech Working Group (IFWG), which recently published an FAQ document as part of its position paper on crypto assets.
The IFWG is comprised of the Competition Commission, Financial Intelligence Centre, Financial Sector Conduct Authority, National Credit Regulator, National Treasury, the South African Revenue Service, and the South African Reserve Bank.
“Exchange Control Regulation 10(1)(c) prohibits transactions where capital or the right to capital is, without permission from National Treasury, directly or indirectly exported from South Africa,” the FAQ from the IFWG states.
It added that this includes transactions where an individual purchases crypto assets in South Africa and uses them to externalise “any right to capital”.
The document goes on to warn that breaking these regulations is a criminal offence.
Contravening South Africa’s exchange control regulations carries a penalty of a R250,000 fine and possibly up to five years imprisonment.
The fine may be increased up to the value of the offending transaction under certain circumstances. However, the regulations specifically link this escalation to “any security, foreign currency, gold, bank-note, cheque, postal order, bill, note, debt, payment or goods”.
MyBroadband contacted South Africa’s three major crypto asset exchanges for comment, but none of them wished to directly address the challenges this pronouncement might cause for them.
Both Luno and Altcoin Trader offer services that allow clients to earn interest on some of the cryptocurrency they hold on their respective platforms.
These products rely on offshore partners to function and it is unclear how the decrees from the SARB and IFWG affect such services.
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