Friday, June 21, 2024

South Africa may reject cryptocurrency investments for pension funds


South Africa features in the top 20 countries in the world, in terms of crypto adoption. Also, for the first time, cryptocurrency trading in the country recently exceeded $ 141 million levels.

That said, a local report reclaimed that South African pension funds will not be able to include Bitcoin and other cryptocurrency offerings under new draft guidelines. If the proposal is accepted After the public comment deadline on November 12, no pension fund can “invest in crypto assets directly or indirectly.”

Previously, Regulation 28 of the Pension Fund Law fictional an investment of up to 2.5% in “other assets”, which could have included cryptocurrencies. However, the changes to the Law will explicitly prohibit investments in cryptocurrencies, according to the report.

Scams on the rise?

What is alarming to regulators is how a growing many investors rely on peer communities for investment advice rather than financial experts. This also resulted in various crypto scams, From the main ones from South Africa.

Recently, Eva Crouwel, Luno’s head of global financial crimes, had indicated on a podcast that the elderly were becoming easy targets for crypto scams from their 2 million users in South Africa.

Compliance issues

The country is also grappling with other compliance issues. Last month, the country had created a special place to declare withheld crypto assets for tax purposes.

But, regulators have recently taken note of the breach regarding crypto assets. Thomas Lobban, Director of Crypto Asset Taxation at Crypto Tax Consulting said in a panel,

“Default is still proving to be a problem in the crypto space among South Africans …”

Another tax expert too warned Cryptocurrency traders, bragging about their profits on social media, from a possible crackdown by the South African Revenue Service (SARS). These could be attempts to seal the sector that lacks a regulatory framework in the country.

It should be noted that last week, a leading bank I had sent a termination notice to an encryption platform that offered arbitration services to its clients.

Furthermore, it can be speculated that the lack of tax compliance by crypto investors and the growing scams in the sector have encouraged South African regulators to tighten the rules. Therefore, the country is expected to eliminate potential investment gaps in the cryptocurrency sector and present more guidelines in the future.

This is a machine translation of our English version.

Ebenezer Robbins
Ebenezer Robbins
Introvert. Beer guru. Communicator. Travel fanatic. Web advocate. Certified alcohol geek. Tv buff. Subtly charming internet aficionado.

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