South Africa Seeks to Bring Crypto Under Capital Controls, Tighten Reporting and Trading Rules
Summary
- South Africa has released a draft proposal to manage virtual assets within its existing foreign-exchange and capital-control framework.
- Under the draft, holders of virtual assets above a certain threshold would have to report them to authorities, and assets whose original purpose no longer exists could be ordered sold.
- Transactions above a threshold would be allowed only through licensed virtual-asset service providers or with prior approval from authorities, and violations could bring fines of up to 1 million rand or five years in prison.
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South Africa is moving to bring virtual assets, including cryptocurrencies, into its formal regulatory framework, in a step that would significantly tighten oversight.
Cointelegraph reported on April 24 that South Africa’s National Treasury had released a draft of its Capital Flow Management Regulations. The draft includes a plan to manage virtual assets within the country’s existing foreign-exchange and capital-control framework.
The proposal indicates that South Africa is effectively treating virtual assets as a means of moving capital.
If implemented, investors holding virtual assets above a certain threshold would have to report those holdings to authorities within a set period. Assets acquired for a specific purpose could also be ordered disposed of if that purpose no longer exists.
Transactions above a specified threshold would be permitted only through licensed virtual-asset service providers or with prior approval from authorities. Travelers would also have to declare their virtual-asset holdings when entering or leaving the country.
Violations could result in fines of up to 1 million rand or prison terms of up to five years.
Uk Jin
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