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Crypto players form association to handle bad actors, regulations

To assist in rooting out the likes of MTI and to help shape the ‘coming regulation’.
Fears of an ‘irrational and unworkable regulatory regime’ have prompted the industry to be proactive. Image: Eva Marie Uzcategui/Bloomberg

A new association temporarily called the Crypto Asset Association of SA (Caasa) is about to be formed to represent the interests of SA’s crypto players in the media and to government.

Invitations were sent out last week to nearly three dozen players in the industry and roughly a third of those have already signed on to the new association.

A recently released white paper entitled ‘Establishment of a South African Crypto Asset Association’ by AltCoinTrader lays out the case for setting up a voluntary, non-profit, non-competitive membership-driven association.

“The South African crypto asset sector has been beset by scams. The occurrence and subsequent reporting of which not only damages the reputation of the sector as a whole but also has a dramatic effect on investor confidence and ultimately discourages further adoption of crypto assets and related products and services,” says the white paper.

It’s also clear that the industry is about to be swaddled in regulations, where cryptos are likely to be shoe-horned into existing regulatory frameworks.

Says the white paper: “This poses a massive challenge to regulators due to the inherent nature of many crypto assets and there is a significant risk to the sector that we may be confronted by regulations that are irrational, unreasonable or unenforceable. Furthermore, whilst awaiting regulatory clarity the regulators have taken a position that existing regulations must apply. In some cases, these regulations stem from legislation drafted ~60 years ago and their application to a digital economy is seen by many as irrational and thus risks irreparable harm to the nascent crypto asset sector.”

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Another motivation for the formation of the association is to present a single, collective industry view to the media, which view is currently dominated by a handful of crypto asset trading platforms (CATPs).

“We believe in the premise that, as an industry, we should not ‘stand back’ and await whatever comes our way, instead play a more active role in shaping our future role in the economy,” say the white paper authors.

The white paper cites several precedents of industry bodies being formed to represent a specific sector, such as the Banking Association of South Africa (Basa), the Payments Association of South Africa (Pasa) and the Association for Savings and Investments South Africa (Asisa).

The white paper outlines several objectives for the association, including:

  • Promoting a regulatory environment that facilitates innovation and protects consumers, stakeholders and the broader public interest with respect to crypto assets;
  • Strengthening the integrity, reputation and efficiency of the crypto asset sector while simultaneously reducing the effectiveness of scams and other criminal elements operating in the sector;
  • Promoting a collaborative approach with legislators, regulators, as well as other business associations and stakeholders, to establish a stable, conducive policy and business environment.
  • Promoting a central source of reliable and accurate information on the sector to promote responsible adoption of crypto assets.

“There is a feeling within the crypto community that if we do not organise and present a strong, credible front to the public and regulators, we will end up with an irrational and unworkable regulatory regime,” says white paper author David Porter.

“The crypto sector is relatively new, and the public has no easy way of knowing which players are reputable and which are not. Having an industry association with a code of ethics is one way to help solve this. We will be able to share information on questionable crypto investment schemes and hopefully avoid another MTI [Mirror Trading International] or Africrypt. And we need to speak with one voice when it comes to shaping regulations around the crypto space.”

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Says Jon Ovadia, CEO of Ovex: “We’re very supportive of the efforts by AltCoinTrader to put together an industry body. It’s important for market participants to work with regulators and this should streamline the process.

“We were hit hard by a regulator misunderstanding the industry. The extent of the damage is still unclear. We do appreciate the response from the Financial Sector Conduct Authority (FSCA) and the apology issued, the problem is people only see the negative stories that catch headlines, and are less interested in the follow-up apologies.”

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Yeah….sure….the likes of Africrypt and MTI will merely join the association and pretend to be legit, until such time as they flee to Brazil with the proceeds of your gambling your children’s inheritance. Stay away.

Great idea!! and much needed.

Regulation in SA will most probably drive crypto investments offshore like many other asset classes. With this I don’t mean people will do this to try and avoid paying tax. People will do it to be able to “Transact” on a first world basis and not third world. DeFi etc. might have to be accessed offshore and might be safer as the anc government does not seem to know what to do with crypto. What is a given is any and everything they touch they destroy.

Unfortunately I don’t see SA being able to regulate crypto properly without it just ending up like the normal run of the mill bank account.

From offshore destinations one will just declare your profits etc. like you do any other offshore assets now.

The issue is SA will be a looser as usual and many “players” will do the same and leave to more favorable destinations.

Lets see!!

Some crypto exchanges need to do some introspection too. It fraud is happening in-house, it needs to be investigated thoroughly and root it out right there. If it is discovered that the fraud happened as an inside job, it needs to be addressed and irradiated asap.

I think this is absolute rubbish. Crypto was created as a different system – system being broadly defined and is different for every country / person. My reason is twofold, readers may agree on one or both.

If people don’t understand something they must stay away. They can’t follow their greed, want to make ridiculous returns (that friends and family tell them with authority that they know someone who “made a killing”) and if they win they arrogantly self appoint themselves as knowledgeable, learned and savvy on crypto. If they lose the same person cries foul, points fingers and blames and demands someone to help. Least we talk about declaration to SARS in the former.

Forming a toothless association is nothing more than some stupid people that didn’t save enough for their retirement and are looking for ways to earn an annuity income. We have so many associations that are nothing more than a website and debit order.

Law Society (LSSA)- declared insolvent a few years ago, tripled members fees for several years in a row. Members forced to bail out.

Look at Estate Agency Affairs Board, post office, PIC, SABC?

For all transport there is: PRASA, CAA, ATNSC, ACSA, ORT+CT+DBN Airport, SANRAIL, SANTACO (and several taxi ass’s), RAF, RTIA and RTMC (what every they are?) and how many more?

Now they want a Crypto Board, if there is one several others must join.

Consolidate the relevant boards, streamline, get them financially sound so the public does not have to pay this tax and fix what we have, only then consider what we want.

Lastly, readers be warned, I am starting the Private Order Of Houses board where there will duly taxed excrement on a “sliding” scale.

This has no connection to the CryptoAssets Association which has been operating for the last 2+ years, and made submissions to SARB and FSCA.
https://cryptoassets.co.za/

There are other bodies too:

Banks/fintech
https://www.safbc.co.za/

Govt-led, seems to be stalled
https://sanba.co.za/

There’s demand by authorities for an industry body which takes instruction from the authorities, and handles the day to day admin of policing members.

“Association” is a big word for a bunch of people who want to check their own homework.

End of comments.

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