<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
Some of the proposals in the\u00a0Draft Capital Flow Management Regulations\u00a0are frightening \u2013 law enforcement officers would be given the power to search your electronic devices and demand you hand over the passwords or seed phrases to your crypto.<\/p>\n
Listen\/read:<\/p>\n
Crypto on the move: Latest SA regulations
\nBitcoiners outraged by SA\u2019s \u2018biggest exchange control\u2019 revamp in decades<\/p>\n
Another criticism of these new rules is that domestic transactions would be treated the same as cross-border flows from a reporting point of view, adding paperwork, costs and regulatory friction.<\/p>\n
The reporting thresholds are also described as vague and the penalties are severe, including fines of up to R1 million and prison terms of up to five years for non-compliance.<\/p>\n
In this Moneyweb Crypto Podcast, AfriDax CEO Frank Leonette walks us through what these proposed regulations could mean for crypto holders.<\/p>\n
The new exchange control rules come on top of several other regulatory measures introduced in the last two years.<\/p>\n
\u201cFirst of all, the travel rule was introduced in November 2024. The Financial Intelligence Centre [FIC] gave us five months to implement [it], which was insane. Generally, that type of regulation, you\u2019re looking at 18 months to get it right and to do it correctly.<\/p>\n
\u201cBut the industry got together and actually pulled it through and implemented the travel rule. The regulations around [it] are quite invasive because you have to transmit information to the destination intermediaries as well. So you lose privacy in the travel rule. And these are the concerns that were raised initially.<\/p>\n
\u201cBut I think the regulators decided that the travel rule needed to be implemented.\u201d<\/p>\n
Listen\/read:<\/p>\n
Dawie Roodt: Do we still need exchange controls?
\nFSCA strengthens crypto licensing and regulation
\nNew exchange control rules: \u2018If they pass, we\u2019re leaving SA\u2019<\/p>\n
Regulators were determined to have South Africa removed from the Financial Action Task Force (FATF) grey list and did whatever was required to accomplish that.<\/p>\n
Then came the draft exchange control regulations.<\/p>\n
\u201cI\u2019ve never seen such a pushback in the crypto industry as I\u2019ve seen with regards to these proposed exchange controls,\u201d says Leonette.<\/p>\n
\u201cThere\u2019s definitely an invasion of privacy again. People having to declare their assets, having to ask for permission, no clear thresholds \u2026<\/p>\n
\u201cAnd it\u2019s creating confusion in the market. The interesting thing will be to see if the actual regulators or the Reserve Bank is actually going to listen to the industry.\u201d<\/p>\n
Listen: AfriDax is SA\u2019s newest crypto exchange [Jan 2025]<\/p>\n
AfriDax was one of the last homegrown crypto exchanges to enter the market, in part because of the high barriers to entry. The costs of running an exchange are also escalating, and that will stifle innovation, adds Leonette.<\/p>\n
He suspects the South African Reserve Bank will hammer these unpopular regulations through, regardless of the backlash, but warns they could ultimately be ignored in practice.<\/p>\n
\u201cJust look at the toll roads, for example. You\u2019re supposed to pay them. Everybody has to pay the toll roads, but nobody does because they\u2019ve just gone too far.\u201d<\/p>\n
Crypto enthusiasts will migrate to decentralised exchanges where privacy is respected and where they can remain beyond the scrutiny of regulators.<\/p>\n
For previous Moneyweb Crypto Pod episodes,\u00a0click\u00a0here.<\/p>\n
You can also sign up for our\u00a0crypto newsletter.<\/p>\n
#regulators #strangling #crypto #crib<\/p>\n","protected":false},"excerpt":{"rendered":"
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