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FSCA again urges caution, vigilance when dealing with cryptos

Says it’s working on measures to regulate ‘certain aspects and players in the crypto asset space’.
image: Shutterstock

The Financial Sector Conduct Authority (FSCA) says it has noted with concern the increasing volume of crypto asset-related losses suffered by financial consumers in the past three months and it urges the public to be “extremely cautious and vigilant” when dealing with cryptos for any financial services business.

“Recently, following the high volumes of complaints to the FSCA and regular media reports of consumers losing some if not all of their savings in high-risk crypto investments as well as crypto-adjacent scams, a crypto health warning was published to the public, highlighting the risky nature of these crypto assets/products, services and scams. The FSCA would like to emphasise, crypto-related investments are not regulated by the Authority or any other body in South Africa. As a result, if something goes wrong, you are not likely to get your money back and will have no recourse against anyone.

“The high risks already inherent in crypto assets is further being compounded by scam activity, as well as unregulated firms targeting consumers with marketing material that highlights the rewards, but not the potential downside, of investing in crypto.”

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“It is for this reason that the FSCA is working at finding measures to regulate certain aspects and players in the crypto asset space.

“These measures will be rolled out during the coming months and we are working with other members of the Intergovernmental Fintech Working Group (IFWG) to better understand and regulate where appropriate crypto assets in South Africa.”

In November 2020, the FSCA published a position paper, ‘The Draft Declaration of crypto assets as a financial product under the Financial Advisory and Intermediary Services Act’, which made recommendations regarding regulating crypto assets. This was as part of the Intergovernmental Fintech Working Group comprising National Treasury, the Reserve Bank and Prudential Authority, Financial Intelligence Centre, National Credit Regulator and South African Revenue Services. Public comment submissions closed on January 28, 2021 and are currently under consideration by authorities.

“The draft declaration in no way impacts the status of crypto assets in the context of other laws such as the Financial Sector Regulation Act exchange control regulations, requirements under the Pension Funds Act and Collective Investment Schemes Act and so forth, nor does it attempt to regulate, legitimise or give credence to crypto assets,” the FSCA clarified.

If it sounds too good …

“Retirement fund trustees must also remain vigilant in their fiduciary duties before mandating investment managers to expose their fund assets to risks associated with crypto assets. The FSCA currently discourages such investments by retirement funds until regulation has been finalised to safeguard investors.

“The FSCA again reminds consumers who wish to invest in any investment asset or product – specifically unregulated, risky ones such as cryptos – that if it sounds too good to be true, it usually is. Consumer caution is strongly advised to avoid painful or catastrophic financial losses.”

Developing story.

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Rubbish! Crypto is safe. It’s the future. It’s a real currency backed by….oh, wait…. Crypto can only go one way, up. Legacy financial transactions are just as risky or worse. Soon, everybody will be using crypto, regardless of the volatility. Just wait. Elon Musk can’t be wrong, can he? A year from now, we will all be buying bread, petrol and cars with crypto.

/sarc.

EVERYONE uses CashApp, and now you can transfer crypto via the app too. Venmo, Revolute, Skrill,…just wait till WeChat. You should spend less time posting cringe and more time booking flights to travel and see the world and how it works.

Me foresees many tears ahead

Bernie Madoff was the man to invest your money with back in the day

He made off with $65 billion, with many a celebrity’s money..He got life!

Today Crypto is the “in thing” (Lets not forget MTI)

I hope you’re right about the future for the sake of crypto investors..Until i can buy bread, milk, a movie ticket or a car for that matter with Crypto, i will stick with what i know

The Fed and Big Banks will either devise a plan to crash it or control it..They won’t let Crypto dictate the way forward

In the meantime, as far as i’m concerned, it’s a gamble either way..Sooner or later a reset will occur, until then If i can’t feel, touch or smell it, i don’t want it.

Crypto here, crypto there, soon it will be crypto everywhere!

Until it all blows up, with the movers and shakers taking the profits and the suckers wondering what happened.

Crypto as an asset class should not be confused with the platform through which crypto assets are traded (which in many instances are built on the same technology as regulated exchanges).

People can make up their own minds as to the merits of a crypto asset as an investment.

Whilst the manner in which orders for crypto assets are entered, matched and settled through a crypto platform may look similar to a regulated exchange they are very different and open to significant abuse. The most important distinction is that there I no segregation of client assets from that of the platform. If the platform goes under so does your cash. And good luck in proving legal title to your crypto asset if it is in the platform wallet.

My simple question is this. After the mining is completed and a crypto is available, what is accepted as payment medium for the crypto when it is sold on? Is it some kind of nefarious promise, perhaps mere trust, or is it US$? From what I’ve seen, it is US$. Then why would the sellers ask for US$? Why not just keep the crypto? Is it perhaps because US$ is ultimately what they want and crypto is just a way of getting people to part with their hard-earned US$. If that is the case, then what exactly does it say about crypto?

BTC mining will cease in 120+ years. Calm down. Mining operations, with many saffers involved, are doing just that, keeping thier mined crypto, they pay local power with credit line or exchange for local fiat. Some chinese local municipalities are accepting payment in BTC. These are basics,” from what Iv seen” you cleary have not seen much.

You have succinctly summarized the real issue at hand. Well done. Unless you are living in Venezuela or Zimbabwe, it’s fairly safe to assume that your currency won’t appreciate by 300% and then crash by 70% over a time span of a few months. This is what central banks are there for: to ensure some kind of price and currency stability. Sure, the rand is depreciating, but it’s over a long term. Even a 20% crash in an actual currency is extremely bad news for an economy. Just ask Argentina.

Now: because there is quite literally no authority, trust or assets (such as the US taxpayer) behind any cryptocurrency, this stability doesn’t exist. If I buy a car in crypto today, but then because of its true nature, that of a speculative instrument, it rapidly rises by 30%, I will be kicking myself in 6 months, for not having waited to buy my new car. I will, in fact, mostly stop buying anything except the basics, hoping my crypto will increase in value. This the economic nightmare known as deflation.

The above should make it clear how self-defeating the greed of the crypto shills are. For them to make money, the useless tokens they are “investing” in, will have to keep increasing in price. But, the more it does so, the less attractive it becomes for real people to use the tokens as an actual currency. This is a textbook bubble – useless crap (tulips, subprime bundled mortgages, crypto) being totally overhyped, shooting out the lights, but then coming crashing down to earth.

People say that this virtual currency, exchanged in a cloud, on an unseen distributed ledger, verified by parties who are unidentified, by people who are incognito, who save it in a virtual wallet in an unkown jurisdiction, offers real wealth because it cannot vanish without a trace!

It is quite the opposite of farming, I must say. I own real physical sheep. They eat real grass and they are protected by real people whose identities are known to me, and some of those sheep still vanish without a trace sometimes. I think I should rather keep my sheep in a virtual wallet in the cloud and secure them with the blockchain.

You should make a digital copy of your sheep, register it as a NFT, and then eat the sheep.

Auction the NFT off for Millions!!

So politicians will ensure the regulation is fit for purpose??

The same people that is “fixing” what they broke when it comes to all SOE’s, municipalities and the SA government in general.

Whahahahaaaaa! This is going to be fun.

Crypto will just follow all other asset classes / investments to some Offshore destination. Plenty there already anyway. Whatever this lot touch stops functioning.

The Moneyweb site is simply astonishing! 😉

It caters for financially-inclined readers under their ‘legacy’ website “Moneyweb” for those interested in traditional Fiat currencies & related investments.

Conversely, it also caters for the fintech-minded folks under their “Moneyweb-Crypto” link, those that fancy crypto developments.

But wait, it’s ALL ON ONE website! What?!

FCSA please tell them that when they have lost everything. Right now the greed had blinded them. They will say things about your mother and you if you keep warning them.

Note. I personally found that the products related to coins are a lot and complex. When a greedy financial hyena hears how money can multiply 5 fold in twelve months then the voice of reason is totally smashed and silenced until the voice of loss come in.

Exercise caution when dealing on the JSE.

Hello everyone i’m so happy i got my refund of 458k USD back from this heartless broker,When it comes to Binary Options, there have been quite a few examples of people who have been taken for a ride by a Broker and have lost a large amount of money and i was a victim,Many of these brokers misappropriate traders money thinking these traders will not act. Beware of where you invest in,Binary Option Scams are quite common and come down to a number of factors including improper due diligence and manipulation by the broker we should be very careful with these so called brokers. If you have lost some funds to any crypto investment company, or any online investment scam; including online dating. Contact; in fo AT sca m sre scue D OT c○m

End of comments.

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