Stratum to Sars: You’re not getting your hands on our customer information

‘We don’t even ask our customers their names.’
Operations like Stratum present a conundrum for the authorities. Image: Chris Ratcliffe, Bloomberg

Crypto investment company Stratum – operating out of Brazil, SA, Asia and the UK – says it will definitely not be handing over sensitive customer information to the South African Revenue Service (Sars) should it be asked.

This follows a statement released this week by the three largest exchanges in SA – Luno, AltCoinTrader and VALR – that they had been asked to hand over information on certain customers by Sars.

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The supposed purpose of collecting the information is risk analysis, “which will inform the need for future action with respect to crypto assets,” according to a joint statement released by the three exchanges this week.

‘Zero chance’

Stratum founder Rocelo Lopes tells Moneyweb there is absolutely “zero chance” of Sars getting its hands on any of its customer information.

“We purposely structured our international operations in anticipation that this day might arrive,” he says.

“We are an entire crypto-to-crypto organisation, set up to ensure we do not hold sensitive information such as bank account details of our clients, in keeping with the highest global standards of privacy of information.”

Stratum’s SA lead, Carmen Potgieter, adds: “Our head office is in Hong Kong, and we have no relationships with any of the banks that can be disrupted, so if you want to be a client of ours, then you are of course welcome provided you already own crypto.

“We avoid any fiat on-ramps that can be attacked by regulators or banks,” she says.

“That is a key foundation of crypto. Our philosophy from the very beginning is that your cryptos should remain anonymous, which is what was intended at the birth of bitcoin and the blockchain.”

Colourful character

Lopes is a colourful character in the crypto world, often jumping on webinars sporting T-shirts you wouldn’t want your children to see. ‘Fork the banks’ is one of his milder slogans.

Stratum customers need only provide an email (supplying your name is optional), and the company refuses to perform the Know Your Customer (KYC) routine on clients. This sets it apart from other operators in this space.

Lopes previously told Moneyweb that should Hong Kong decide to clamp down on cryptos, the company would find a new jurisdiction that was more sympathetic to cryptos.

Rebellion asset

Says Potgieter: “Cryptos were born as a rebellion against a broken financial system, so it is against our philosophy to pretend we are just another add-on to a financial system that is intent on spying, detailing and gathering information about our customers.

“That is not our purpose and we refuse to do that. Not because we want to encourage criminality, but we do not wish to be agents for law enforcement or tax authorities either.

“They must do their jobs but we will not get involved. Nor are we obliged to.”

Operations like Stratum present a conundrum for authorities. Though it operates in SA, it falls under Hong Kong jurisdiction and technology places it beyond the reach of any national authority.

Stratum offers a bundled investment spread across 14 of the largest cryptos, an advanced wallet where customers can earn interest on their cryptos and earn tokens as loyalty rewards, and an Over-The-Counter (OTC) desk for those who want to purchase large volumes of cryptos.

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COMMENTS   46

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Looks like SARS will have to double their current manpower to police Crypto then? At least it will create some much needed jobs. That’s a good thing right??

Or.

They can be reasonable with much needed regulation within limits and not conduct it in typical anc pusillanimous manner.

SARS (the ANC) be reasonable? NO CHANCE. The ANC is all about state control and Centralism. Anything they cant control they will make illegal.

Don’t stress SARS will get a record of all transactions from the banks . There isn’t one bank in SA that won’t cooperate with SARS ! There is record of every transaction . Threatening tax authorities never works …..

I agree, if SARS can put a block on your bank account and lay claim to all money going into it, what are the chances that SARS does not know about every penny going in or out of your account? They asked these specific exchanges because they saw the money flowing into them from specific accounts. They are not fishing, they are building a case.

did you not read the article? There are no bank accounts linked to the platform.

Why must we pay Tax if Zuma has apparently illegal Tax payer money in Dubai and Pakistan plus a Mansion in Dubai?

Is that not very Illegal???? Did he declare it to SARS?

SARS anyone for comment?

im reading all the comments here

SARS cannot even go after the individuals in the GREAT GUPTA THEFT.

All transactions were disclosed at the Zondo Commission. Guess what? NO ACTION BY SARS.

ALL Banks IN SA can provide a detailed account of every transaction relating to STATE CAPTURE. Guess what? NO ACTION BY SARS. Have you seen a Gupta in Jail?

Honestly, SARS cannot get its ACT together in SA… SARS has a brain drain.
MY contacts on the inside and outside of SARS says its struggling. Labour in SA is lazy…. Education Standards Dropped…
CA’s of today can compete with my Gardner.

…. Give SARS another 27 years (2021-1994) … this time there is no Pravin Gordhan. Another Tom Moyane and that will be the end of taxes

This all sounds very exciting but the potential for fraud must be huge. No names, no contact details, no ID. That’s exactly the way I operate in the casino.

Exactly the way paying taxes in South Africa operates. Nobody knows where it goes.

Esor: The more tax they get the more they loot!

Bitcoin and other crypto products have been declared a financial asset/product by the FSCA.. this comes with some red tape and given the plethora of abuse by crypto exchanges/wallets which acted fraudulently (don’t act naive.. it’s been in many news feeds) I’m not surprised SARS is investigating each operator.

Customer data is also a concern for tax evasion and illicit funds.. banks are regulated specifically for this and look where that’s gotten them. As someone mentioned there has been illicit funds(fraud) flowing through banks BOTH national and international with the guptas & Zuma stuff so no.. SARS wanting to know info should not be a surprise.

I do wonder though how long before the reserve bank, sars and fsca et al slap the operator with fines and compliance or hamper business as a result. I guess we will see a follow up article with operator claiming overreach..

Lovely. Great News!

a Big finger to SARS!

Fighting talk but don’t be surprised when the authorities close you down and prevent you from operating in SA. Don’t touch SARS on its revenue.

It’s only a matter of time until all governments put an end to this.

They haven’t heard of the OECD yet. Wait until the CIA lists them as an international terrorist organization for facilitating illicit money flows and see how fast they change their tune.

There are 195 countries in the world, you have far to much faith in global law, order and cooperation. I speak from recent experiance, eg Chinese Banks answer to no one but the CCP. They dont even send a “do not reply email” to countries law enforcement authorities. Western countries clout is rapidly diminshing in the 21st century. Africa?? LOL, a complete free for all.

if you are happy to have a bank:
with no major credit or debit card
with no ability to transact in dollar, pound, euro, swiss franc or yen – whether as lrimary or correspondent bank – then go for it.

why are you gleeful about the prospect of this?

Don’t we all want to show SARS the middle finger? We need more freedom and less state intervention. We need personal liberty and less government control. We need private money instead of government money.

The sad reality is that the majority of voters need the coercive power of the state so they can under the property of savers. Governments have a legal monopoly on the creation of currency and they will defend this monopoly with everything at their disposal.

This is the reality.

SARS is the extortion arm of the ANC ethnic cleansing regime. The ANC’s activities are both illegal and immoral. There is no moral high ground when it comes to this diabolical organisation. SARS is also an acronym for a pathogenic virus- no coincidence there.

The “CIA”

LMAO…probably the biggest mafia operation in the world !!!

I dislike SARS as much as the next person but this is just an open invitation for criminal activity. If Stratum think they’re clever, they must think again. Aiding criminal activity will get them unwanted attention from international law enforcement, SARS will be the least of their worries then.

”The art of taxation consists in plucking the goose as to obtain the largest possible amount of feathers with smallest possible amount of hissing”

Jean-Baptiste Colbert French Politician (1619-1683)

The se guys will start ”hissing” soon!

Maybe these ”Bitcoin Yuppies” should do some research and homework, before they make arrogant statements, like this.

The U.S. sanctions laws are a set of legal requirements designed to achieve U.S. foreign policy and national security goals. They are administered by the Office of Foreign Assets Control (“OFAC”) within the U.S. Treasury Department, in conjunction with the State Department and other U.S. agencies.

A major component of the U.S. sanctions program is that OFAC often targets individual persons and entities for the imposition of individual sanctions.

Targeted parties are placed on the OFAC SDN List and all property and property interests of the targeted parties are blocked and may not be transferred, paid, exported, withdrawn or otherwise dealt in.

The se guys will start ”hissing” soon!” [ sic]

Yes, possibly because the centralized international banking system resembles a den of snakes ?

No wonder people are flocking to Bitcoin.

“Maybe these ”Bitcoin Yuppies” should do some research and homework, before they make arrogant statements, like this.”

Maybe you ‘Statist Yuppies’ should research Bitcoin more.

“The U.S. sanctions laws …”

Oh right…good ‘ole USA

The most aggressive warring nation on earth, invoking more wars and invaded the most countries since WW2 then all other nations COMBINED.

The same country responsible for the Petro$ and the Military Industrial Complex….

And every junta around the world for governments that did not comply with Uncle Sam.

SMH !

I can see I touched a ”token” nerve here. What is a crypto asset?
The Draft Declaration defines a crypto asset as “any digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes, but excluding digital representations of fiat currencies or securities that already fall within the definition of financial product”
Maybe you should also have a look at the implications of the Draft Declaration by the FSCA.
If crypto assets are classified as financial products, then only persons who are authorised under the FAIS Act to provide advice and/or intermediary services in respect of financial products will be permitted to market, offer and/or sell crypto assets and the same consequences for any failure to comply with the FAIS Act will be applicable to FSPs ho make the asset class available to investors.
Whilst the Draft Declaration sets out the FSCA’s intention to classify crypto assets as a financial product under the FAIS Act to provide, amongst others, greater protection to South Africans who invest in crypto assets, the FSCA is at pains to clarify that the classification of crypto assets as a financial product does not in any way legitimise the asset class and is not intended to influence how crypto assets are treated under any other South African legislation.
Further, the service provider (as a licensed FSP) and its authorised representatives will be required to comply with the General Code of Conduct for Authorised Financial Service Providers and Representatives, 2003 and the Determination of Fit and Proper Requirements, 2017.
Why shouldn’t you have to pay tax on these ”Yuppie Tokens?
Every single transaction (both imports and exports etc) is subject to vetting when it arrives at a authorised SA Bank. Excon and OFAC vetting are done and no transaction will leave the queue without passing these compulsory and stringent test. I had a handful of these transfers that were declined/returned due to OFAC considerations.
My view on any form of trading/investment is simple – it must be regulated, hence my view that ”Bitcoins” gives rise to the MTI like circus we are currently experiencing!
And then the US – I am also a bit disappointed in their conduct lately – I think they should removed all the radical elements in the Mid-east! Millions of people are suffering as a result of the turmoil in the Mid-East.

Not that useful if you cant use them to get into crypto from fiat. This is just a swap platform.

with respect but these clowns may as well hang a sign outside the door:

Have money to hide from spouse or rightful owners, need secure place to receive ransomware, need to fence stolen anything? We are your guy

THERE IS NO PLACE IN THE MODERN WORLD FOR SECRET ANONYMOUS WEALTH.

I’d support the governments shutting these places down till only a barge in the Atlantic grants them rights = nice practice for a navy ship

cool story you government bootlicker. In case you haven’t noticed, SARS has its boot on your neck while milking you dry, yet you cheer it on. Hope you enjoy Stockholm syndrome

Old lesson from my grandmother : if you are not willing to publish what you did and how in the koerant, you should start questioning what you are doing.

But fine, you can hide with the other anonymous crooks while we pay your taxes and you bitch and moan about how corrupt Zuma and Jooste are.

Till one day is one day and you buy or rent something that doesn’t make sense. Then expect no sympathy

Has SARS been returned to normal (non corrupted) service following the State capture era? or does it still have doors that open to special cases for special favors?

Good point.

I think its just a different faction in the anc that now deployed there goons???

One of the reasons why Crypto is still not banned outright is due to the fact that there is enormous, fictional wealth being built in cyberspace.
What a wonderful thing to tax is it not?
The revenue collection authorities will push for legislation (worldwide) to cash in on this bonanza.
Just a matter of time

Of real concern should the the statement: “‘We don’t even ask our customers their names.” because, if things go wrong the investor losses everything because ‘We don’t even ask our customers their names.’

you think that knowing their name will stop them from losing their funds?
Ask MTI about that, they knew all their clients names. This is an asinine argument.

I’m very eager to play my part in taxes to the state, but at the same time become very bitter at times when considering the present ongoing and increasing embarrassing, rotten and shameful immoral state of affairs in SA (from the top down), with virtually nothing or little to show for the trillions of taxes collected since the bloody present regime took office. Man, at all levels, the country is in a state worse than just being in limbo, it’s retrogressing, moving in the freakin opposite direction with growing pressure to unjustifiably (through all sorts of unjustified useless reasons, except the one they should be really addressing en masse), milk the innocent tax base for more and more. Now, can anyone show me under these present conditions why a SA citizen would be IMMORAL for not wanting to play their part any more in making their contribution. Where is the incentive? What it boils down to here is that the innocent tax base is being pressured in a nice round about way through no fault of their own, to the point of being potentially jailed, to continue subsidizing the ongoing criminal activities of corrupt, rotten, stinking charlatans and thieves, masquerading as angels of light in the public eye, in their nice, expensive, presentable suits, their pretentious, supposedly respectable behavior that looks so deceitfully good, and their supposedly awe inspiring, politically correct speeches that wows but blinds the deceived to their immoral, bloody incompetence for whom the jail cells should really be mean’t, but isn’t.

why would you be happy to pay your taxes and then write a speech about why its such bad value? There is nothing wrong with taking a stand and saying taxation is theft.

Citizenship comes with many benefits, opportunities and costs in the form of taxes. Nothing stops anyone getting involved in civic duty either on the political side of things or via the plethora of institutions meant to keep the state honest.

Why is it that people refuse to any of the above but feel justified to do tax evasion? Ie if fraud and corruption is your central argument, nothing stops you from tackling this head on. Most fraud is part of tender processes.. form a org that gets company’s to agree to only do business with direct vetted consumers or vetted entrepreneurs cutting tenderpreneurs at the kneecap.. yes? No.. no one does that. Wonder why..

It was funny to me.. I was watching a YouTube vid where they were interviewing multimillionaires in the US wrt the likelihood that taxes are on the way up fast. And the guy was like.. he doesn’t understand why his peers are opposed when his green card afforded him the opportunity to be wealthy in the first place without which he would not be where his is so the cost, tax going up by 2%, is a a small fee for it. 2ndly there is a long line of people who are begging for an opportunity to get it so..

The amount of people in the comments section who seem to think the KYC is the only thing that separates law abiding citizens from criminals is insane. Everybody has a right to privacy, this is a fundamental right, not one given to you by any government. Prior to the 1990’s hardly anyone performed KYC, did this match up with rampant criminality? No, of course not.
The only reason KYC exists is so that governments can extract every last tax-cent out of you with nowhere to hide. Then the added insult is that your personal information gets hacked, stolen or sold leaving you with a case of identity theft. There is no upside to KYC to you as an individual.

Man up, take some sovereignty back and stand by businesses that tell the government to f-off. Because in case you haven’t realized yet, we are being treated like tax-cattle and having our freedoms stripped from us daily. The march to totalitarianism is not something that happens overnight, but through the slow creep of tyranny, with things like normalized KYC being just a small step in the process.

For those of you that think “if you have nothing to hide then you have nothing to fear”, stop swilling soy-milk for a second and grow a pair of balls. Everyone deserves privacy.

P.S. SARS can suck a fat one.

What did soy-milk have to do with it?

Refer’s to the term ‘soy boys'[ the weak generation of today ]

“noneofyabusiness” has a point.

KYC is no silver bullet but it is definitely a deterrent at the very best and can assist in identifying faces behind criminal activity at the least. Present a single example of a completely good thing that humans haven’t found a way to mess up. KYC is no exception – it’s a necessary tool that a few people abuse. To ask the public to support its abandonment under some misguided notion of “growing a pair” and / or “taking sovereignity” is stupendous logic (if one can call it logic at all). How one can’t see the glaring problems with money transfers that cannot be traced in crime ridden countries like SA or Brazil simply eludes me!

@ noneofyabusiness

Great comment !!

Bugger SARS! In SA, Kieswatter is the ANCs lackey – he even wants to deprive families of disabled people of their rebate so his comrades can spend more on personal luxuries.

SA needs a tax revolt – it’s just more for Mango airline’s uncompetitive behaviour in the local aviation space and Gordhan’s fat ego! Tito Mboweni recently openly said SOEs will need more bailouts – SAA and Mango are first in the line! So-called strategic assets – what a joke these cadres are!
While we have no trains and roads are riddled with potholes!
Kieswatter is a fat chancer trying a sly move to get his hands on personal information (to facilitate more looting!)

Cryptic Crypto’s!
Wow, you don’t say…

Honestly, is it always necessary for someone to have to draw our ‘clevers’ a picture?

STRATUM: My heroes! Let’s face it, SARS has become a very efficient leech of one’s assets under the able leadership of Kieswetter. Anybody who prevents this organisation from unwanted intrusion is worthy of a Nobel prize.

Sars treating cryptos like stocks on a stock exchange is the main problem. They made the taxing of cryptos overly complex for normal individuals who just want to press buttons on an app. And people freaking out over no KYC, hahahaha, clearly you don’t understand cryptos and are happy with a big brother government. If you have to KYC on an exchange, then it is 100% guaranteed you do not own your own cryptos on that exchange, they own it. The only way you own your own cryptos, is if you put it into a private wallet where you own the private key yourself. The blockchain of the crypto is the thing that regulates the crypto, no need for third party regulations.

Criminals will always find a way to hide taxation. Sars is just trying to alienate more of its customer base, who are already sick and tired of paying some of the highest taxes in the world, and getting nothing in return. And lo and behold, most of the tax money is anyway stolen. So first fix the real issues, before you destroy your ever-shrinking tax base further. Ridiculous!

End of comments.

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