Financial Sector Conduct Authority (FSCA), a South African financial markets regulator, has recently issued a warning against crypto scams. On Thursday, February 4, 2020, FSCA concerns about the growing crypto scams across the country. The regulator took this step as it has been receiving a huge number of complaints from investors across the country. FSCA has been receiving a lot of complaints from the crypto investors who lost their funds due to investing in a scam.
FSCA Issues Warning After Crypto Scam by Mirror Trading International
FSCA came to action after the recent scam by Mirror Trading International. The firm has defrauded around 28,000 investors including both local and global. It has promised the investors to give a 10 percent return on their investments each month. However, the company didn’t meet expectations and investors end up losing around $644 million in this scam.
Due to such a huge scam, the regulators of the country have become more rigid towards Bitcoin. There are several reports which claim that FSCA might be thinking of regulating all the digital assets, which also includes Bitcoin and Ethereum. Back in the previous year, a governmental working group signaled to impose strict regulations on cryptocurrencies.
Pointing Out Risk Associated With Crypto Investment
As FSCA issues warning on crypto scams, it has also specified that these investments are not regulated by any government body in the country. The regulator has also mentioned the potential risk associated with crypto investments. According to FSCA:
“Investing in crypto assets, or investments and lending linked to them, generally involves taking very high risks with investors’ money, which means that you should be prepared to lose all of your money.”
Along with this, the South African tax department is also sending notices to crypto traders. Not only here, but many of the global agencies have been sending similar kinds of notices to the people involved in crypto trading. As crypto adoption is increasing rapidly, it has been seen that many global regulators are getting rigid to cryptocurrency.