South Africa’s Primary Financial Regulator Proposes New Crypto Regulations In The Country

South Africa’s Primary Financial Regulator Proposes New Crypto Regulations In The Country

  • South Africa’s financial regulator is looking to regulate cryptocurrencies and introduce laws to prosecute fraudsters in the industry following the uncovering of the “largest Ponzi scheme.”

Reports from Bloomberg confirms that South Africa’s primary financial regulator, Financial Sector Conduct Authority (FSCA), is planning to regulate cryptocurrencies such as Bitcoin, Ethereum, and Litecoin. The regulator is making proposals to oversee the cryptocurrency industry, prosecute fraudsters and “put people in jail,” the Head of enforcement at FSCA, Brandon Topham, said.

“At the point, something becomes a Ponzi scheme, we have lost our jurisdiction,” he said. “We need the police and the prosecuting authority to work fast and put people in jail.”

This follows the recent uncovering of a Ponzi scheme by a top Bitcoin trading desk, Mirror Trading International Ltd., said to have collected over 23,000 BTC (~$700 million) from its customers. In December, MTI, with over 260,000 customers on its books, was placed under ‘provisional liquidation’ as the customers rushed to withdraw their funds.

South Africa’s Mega-Million Bitcoin Scams

The rising demand for the world’s largest digital asset, Bitcoin, drives up the number of scam projects in the space. The MTI saga started in early 2020 when questions arose on whether the company was running a Ponzi. Then, the FSCA stated the company was not a Ponzi but rather lacked a crypto trading license.

After several investigations on the firm, the FSCA “found that the company kept neither accounting records nor a comprehensive register of participants, apart from 170,000 unique email addresses” recovered during a raid on the company in October. This led to more speculations of MTI running a Ponzi as MTI’s Chief Executive Officer Johann Steynberg fled into hiding – believed to be in Brazil.

In 2009, an alleged Bitcoin Ponzi ring involving over 800 investors across eight countries was stated to have stolen close to 12.5 billion rands (~$800 million) in a scam operation. According to Topham, such mega million scams are getting out of hand, who called for action against the MTI investors. He said,

“We need to make an example of MTI so that people understand that investing in a Ponzi is never a good idea.”

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Author: Lujan Odera

Institutional Asset Manager, Stone Ridge, Buys 10,000 Bitcoin as its Treasury Reserve Asset

The $10 billion institutional asset manager has bought 10k BTC worth $115 million as its “primary treasury reserve asset.”

Publicly-traded MicroStrategy first started the narrative (twice), then last week, Jack Dorsey’s Square bought $50 million Bitcoin, representing 1% of company assets.

Already 15 public companies have bitcoin in their Treasuries, and several small businesses like Tahini and Snappa have converted their US dollars in the balance sheet with the leading digital asset.

Now, Stone Ridge Holdings Group has jumped on the BTC as a reserve asset train. The investment was based on the thesis that “the long term growth of an open-source monetary system—in assets like bitcoin,” co-founder Robert Gutmann told Forbes.

Its crypto subsidiary NYDIG also announced on Tuesday that it had raised $50 million in funding led by VC fund FinTech Collective along with Bessemer Ventures and Ribbit capital.

NYDIG, which offers prime brokerage and custody services to institutional customers, is among the handful of companies that have obtained New York state’s BitLicense.

Gutmann, who has taken over as co-founder and CEO of NYDIG, also shared that they are seeing “pretty dramatic acceleration in the count of institutional investors who want to participate in the market since March of this year.”

The unprecedented fiscal and monetary stimulus post-COVID-19 pandemic, according to him, will drive more and more people to hedge their investment portfolio with digital assets.

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Author: AnTy

No More Selling Pressure from $5.7B PlusToken Ponzi as Chinese Police Arrest 82 Members

Chinese police have finally arrested all 27 primary suspects involved in the Plus Token Ponzi scheme.

The investigation led by the Ministry of Public Security successfully arrested all the major suspects and 82 key members of the case, reported Chinese financial news outlet CLS.

The Multi-level marketing (MLM) scheme has reportedly grown to 3,000 layers in the past year, frauding more than 2 million people for a whopping over 40 billion yuan, about $5.7 billion.

A year back in August, Chinese police officials arrested six suspects involved in this scheme, but the main suspects were still on the run at that time.

With this Ponzi scheme, the Chinese police have cracked down on one of the biggest Ponzi Schemes involving bitcoin as an exchange method.

PlusToken was launched in early 2018 and then in mid-2019 when some users couldn’t withdraw their funds from the wallets; it solidified the earlier suspicions of it being a pyramid scheme although the company tried to brush it off as a “hacker attack.”

Over these months, PlusToken has been a red sword hanging on bitcoin’s price’s head as time, and again the stolen funds were moved. Just last month, its entire Ether stash, about 790,000 ETH, was moved, spreading a wave of terror that it may cause Ethereum price to dump.

Given that bitcoin bulls now have “little to no baggage,” Dovey Wan, founding partner of Primitive Crypto, said, “let’s send it to the moon.”

The leading cryptocurrency is currently trading just over $11,000 after breaking key levels $10,000 and $10,500 this week.

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Author: AnTy

Multiple Complaints Filed on Unlicensed BTC-e by US Prosecutors for Conspiracy, Money Laundering

  • The primary accused — Alexander Vilink — was allegedly claiming to be the owner of BTC-e and even sent out emails to his clients assuring that he would allow them to launder their funds without being caught by the government.
  • Vilink is currently serving a prison sentence in Greece. Not only that, he is also facing fresh new charges related to money laundering by the US Treasury Department — as a result of which, he might have to face a longer imprisonment term.

As per an all-new court document made available by the Northern District of California, US prosecutors have filed a formal complaint against BTC-e — a crypto exchange that is now defunct — as well as its alleged owner Alexander Vinnik. Additionally, a closer look at the filing shows us that the FinCEN (Financial Crimes Enforcement Network) determined late last year that the penalties that need to be levied on BTC-e and Vinnik should be around $88 million and $12 million, respectively. This is because Vinnik did not register his trading platform with the regulatory body and also failed to implement a number of Anti-Money Laundering practices that are required these days.

Back in 2016, BTC-e and Vinnik were charged with running an unlicensed money services business.

Similarly, the following year, a jury issued another indictment that contained additional charges related to money laundering against Vinnik.

The aforementioned court document clearly shows that the exchange did not follow through with the required identity checks required to facilitate monetary transfers ranging above a certain amount. If that wast enough, the report also states that BTC-e was used by criminals for their liquidation-related activities.

Some of the miscreants who made use of BTC-e on a regular basis used the platform to facilitate nefarious activities like hacks, ransomware payments, identity theft, and drug deals.

More On The Matter

For those of our readers who may not be aware, Vinnik is a citizen of Russia who is currently serving a sentence in Greece for his role with BTC-e as a senior management official. Now, the US Department of Treasury too is indicting him (as well as his exchange) on fresh new charges related to money laundering — it is being alleged that Vinnik sent out a number of emails in which he claimed to be the owner of BTC-e.

[Author Alert] The author’s opinions above are solely based on their own self-conducted research. Assume any and all authors are using, holding, trading and/or buying cryptoassets mentioned as a portion of his or her financial portfolio. Use information at your own risk, do you own research, never invest more than you are willing to lose.

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Author: Shiraz J