Regulator Claims South Africa Set to Unveil Cryptocurrency Regulatory Framework in Early 2022

In early 2022, South Africa will have a new regulatory framework that covers cryptocurrencies, a commissioner with a regulatory body has said.

Highly Risky Products

South Africa’s financial sector regulator, the Financial Sector Conduct Authority (FSCA) is set to unveil a new regulatory framework that covers cryptocurrency in early 2022.

According to Unathi Kamlana, a commissioner with FSCA, the new framework will determine how the trading of crypto coins like bitcoin (BTC) should be conducted. In his remarks during an interview, Kamlana suggested his organization was not keen on legitimizing highly risky products. The commissioner said:

What we want to be able to do is to intervene when we think that what is provided to potential customers are products that they don’t understand that are potentially highly risky. We must be very careful to not just legitimize them.

The FSCA, which is reportedly drafting the crypto trading rules in conjunction with other regulatory bodies, will also examine how the currencies interact with traditional financial products and if these pose a threat to financial stability.

Cryptos Do Not Pose a Systemic Risk

Still, in his remarks, Kamlana asserts that cryptocurrencies do not pose a systemic risk to the stability of the financial services sector just yet. The commissioner however said the FSCA sees cryptos as assets and not currency.

Meanwhile, in keeping with the stance adopted by several countries, Kamlana urged South Africans to shun privately issued/created digital currencies which are not as stable and reliable as stablecoins issued by central banks.

“I think that if I were to give advice to retail investors, I would say wait to see what comes out of the process of the work of the central bank. The best outcome in terms of stable coins is what comes out of central bank innovation, given their reliability and stability,” said Kamlana.

What are your thoughts about this story concerning South Africa’s regulatory framework for digital assets? Tell us what you think in the comments section below.

Australia to Regulate Crypto Sector as Part of Payments Reform

Australia to Regulate Crypto Sector as Part of Payments Reform

The government of Australia is preparing to comprehensively regulate the activities of cryptocurrency exchanges and custodians. The push is part of a major overhaul, aimed at preserving the country’s sovereignty over its payments system, which will also affect providers like Apple and Google.

Payment Laws in Australia to Cover Crypto Business and Big Tech

Authorities in Australia are gearing up to update the nation’s legislation governing payments in the largest reform of the industry in over two decades. The changes will expand the regulatory framework to encompass new payment processors in the online space including those dealing with cryptocurrencies.

Australia to Regulate Crypto Sector as Part of Payments Reform

In 2022, the government will begin consultations on the establishment of a licensing framework for crypto exchanges and the regulation of platforms holding digital assets on behalf of clients, Reuters reported. Canberra also wants to explore the feasibility of a central bank digital currency (CBDC) issued by the Reserve Bank of Australia.

With a daily number now reaching 55 million, non-cash payments, including crypto transactions, have spiked during the Covid-19 pandemic as many Australians have turned to online options. Close to half of them are using their phones to make payments while in 2021 those transacting in crypto have increased by 63% over the previous year.

Australia’s plan to broaden its payment regulations also aims to cover online transaction processors such as Apple and Google as well as buy-now-pay-later providers like Afterpay. The goal is to put an end to their unsupervised operations in the country. Speaking on the need for the amendments, Federal Treasurer Josh Frydenberg warned:

If we do not reform the current framework, it will be Silicon Valley that determines the future of our payment system. Australia must retain its sovereignty over our payment system.

Google and Apple have so far refrained from commenting on the announcement but a spokesperson for Afterpay has been quoted as stating that the company supports “any approach that takes into account consumer benefits from the innovation and competition Afterpay has brought to the market.” The platform has agreed to a buyout from Twitter founder Jack Dorsey’s payments firm Square, Reuters noted.

Australia’s move comes at a time when a number of other major economies are taking steps to determine their regulatory policies regarding financial innovations, including cryptocurrencies. Unlike China and India, for example, Australia is preparing to take a more inclusive approach similar to that of the United States, the report suggests.

Do you think the Australian government will adopt crypto-friendly regulations? Share your expectations in the comments section below.

Another Unnamed Investor Offers to Bail Out Collapsed South Africa Crypto Firm

A new unnamed investor has offered to bail out Africrypt, the collapsed South Africa-based crypto investment company, with $5 million. The offer, which does not require criminal charges against Africrypt directors to be dropped, must be accepted within seven days.

A Better Offer

A new mystery investor has offered to bail out the collapsed crypto investment outfit, Africrypt, with $5 million, a report has said. However, investors have been given seven days to accept an offer that was made on December 3, 2021.

As previously reported by Bitcoin.com News, another unknown investor had initially offered $5 million in exchange for 51% of Africrypt’s shares. As part of the conditions for this offer, the investor wanted all criminal proceedings against the missing directors of Africrypt, Raees and Amir Cajee, to be dropped.

Unlike the first bailout offer, the latest one — according to a report by Moneyweb — does not compel creditors to agree to the condition that was proposed by the first investors. Nevertheless, this fresh offer forces investors to accept just a fraction of the money they initially invested.

This condition means that Afrcrypt investors would not benefit from the increase in value of crypto assets that were acquired by the company in September of 2019. As explained in the report, investors would only be entitled to a payout that is ten times less than the current value of the digital assets they are owed.

Although the identities of the two new mystery investors are still unknown, Ruann Kruger, a legal representative of Africrypt’s liquidators, is quoted in the report confirming that the second investor is in fact a company. The lawyer also confirmed that out of the 181 investors, about 35 have accepted the offer.

Allegations Against the Cajee Brothers

The report states that some Africrypt investors believe the latest offer is being made by the Cajee brothers, quoting one unnamed representative of investors who said:

There are of course suspicions that this offer is coming via a proxy for the Cajees, and that we are being paid out with [our] own money. Either way, this is a clever tactic by whoever the investor is. It’s a divide [and] rule tactic.

Meanwhile, allegations that the Cajee brothers are also behind the first offer appear to be corroborated by a letter sent to Africrypt investors by the liquidators. In the letter, the liquidators suggested that the first mystery investor had stopped communicating with them after they proposed to amend certain terms of the initial offer.

Concerning the latest bailout offer, the liquidators said this one is “a good, firm and less complicated offer that is open for acceptance for the next seven days.” According to the report, investors that accept the offer will receive 65% for every rand (or 65% of the invested funds) for any proven claim within five days of the signing.

Do you think that the latest offer to Africrypt investors is better than the first one? Tell us what you think in the comments section below.

Bitwise CIO Says $100K Bitcoin a Difficult Prediction to Make, Calls Ethereum the ‘Asset of the Year’

Bitwise CIO Says $100K Bitcoin a Difficult Prediction to Make, Calls Ethereum the 'Asset of the Year'

While there’s been an awful lot of calls for bitcoin to reach six-digits in value in 2021, as the end of the year draws closer, it doesn’t seem like $100K per bitcoin will happen. Bitwise Asset Management’s chief investment officer Matt Hougan told the press on Monday that “$100,000 by the end of the year is a difficult prediction to make.”

$100K Bitcoin Prices May Be Unattainable in 2021 — Bitwise Exec Says Next Year ‘Investors Are Going to Be Looking at Ethereum’

For a good portion of the year, many bitcoin advocates, experts, luminaries, and analysts predicted that bitcoin (BTC) would surely hit the $100K per unit range in 2021. One of the most popular forecasts belongs to Plan B, the creator of the stock-to-flow (S2F) bitcoin price model. Plan B said based on the pseudonymous analyst’s “worst case scenario for 2021 (price/on-chain based)” would be “Aug>47K, Sep>43K, Oct>63K, Nov>98K, Dec>135K.”

However, November’s price call missed and the $135K prediction looks like it will miss as well. Bitcoin would have to double in value over the next 24 days gathering a touch over 96% during that time. Plan B is not the only one that has predicted BTC could hit six-digits in USD value by the year’s end. The financial institution Standard Chartered predicted at the beginning of September that bitcoin’s value could reach $100K by the end of the year.

Yahoo Finance contributor, Javier David, said on October 21, that “suddenly, a bitcoin move to $100K doesn’t seem so farfetched.” In fact there’s a great number of analysts that have said that at some point in the future, bitcoin prices will touch the six-digit zone or $100,000 or more per unit. Speaking with Bloomberg’s Emily Chang, Bitwise Asset Management’s CIO Matt Hougan explains that bitcoin hitting $100K will be difficult in 2021. Hougan further explained that ethereum (ETH) was the “asset of the year” in 2021.

“I think as we look into 2022, we still have these fundamental drivers, the institutions we speak to every day at Bitwise,” Hougan explained. “$100,000 by the end of the year is a difficult prediction to make — I think $100,000 could be in target in 2022 but this year, I’m not so sure,” Hougan remarked.

Hougan Predicts an ‘Explosion of Activity Built on Ethereum’

As far as the second-largest crypto asset by market capitalization, ethereum (ETH), Hougan thinks 2021 was the digital currency’s year. While noting to Bloomberg’s Chang that ethereum was the “asset of the year,” Hougan also stressed that there will be an “explosion of activity built on Ethereum” next year. But investors will be looking at other smart contract blockchain networks as well, the Bitwise CIO said. Hougan added:

Investors are going to be looking at Ethereum, Solana, or Polygon. Investors are starting to realize there’s more to crypto than just Bitcoin. If there’s one bigger story for next year, it’s going to be everything else: crypto as defi, NFTs, Web3, or metaverse.

What do you think about the Bitwise CIO’s cryptocurrency predictions? Let us know what you think about this subject in the comments section below.

AOC Says She Doesn’t Hold Bitcoin so the Lawmaker ‘Can Do Her Job Ethically’

AOC Says She Doesn't Hold Bitcoin so the Lawmaker 'Can Do Her Job Ethically'

Alexandria Ocasio-Cortez, otherwise known as AOC, is a New York representative well known for her political stances and statements. The Democrat believes that it is “absolutely wild” that U.S. representatives can buy and swap popular stocks. AOC also thinks it’s not ethical for members of Congress to own cryptocurrencies.

AOC Doesn’t Hold Crypto Because She Wants to ‘Remain Impartial’

Lawmaker Alexandria Ocasio-Cortez (AOC) discussed owning bitcoin (BTC) in a recent Instagram story she told on Monday. AOC explained that she doesn’t believe members of Congress should own stocks and the same morality applies to digital currencies in her opinion. During her Instagram story, AOC said she doesn’t hold BTC because she wants to remain impartial and an unbiased lawmaker.

“Because we have access to sensitive information and upcoming policy, I do not believe members of Congress should hold [or] trade individual stocks and I choose not to hold any so I can remain impartial about policy marking,” AOC insisted on Instagram. “I also extend that to digital assets/currencies (especially because I sit on the Financial Services Committee). So the answer is no because I want to do my job as ethically and impartially as I can,” AOC further stressed in her Instagram story.

In 2017 AOC Said She Wasn’t Sure ‘About FEC Laws Regarding Crypto’

Close to four years ago in December 2017, AOC was asked if she accepted bitcoin after she tweeted about a fundraising campaign that year. “Not [until] Actblue does,” AOC said at the time. “Also I’m not sure about FEC laws regarding crypto. Good question,” she added. “Sadly reporting this info is law and must be collected, even with cash donations,” AOC continued on Twitter. “It’s unfortunate that our campaign finance laws demand more stringent reporting of regular small donors than they do from Superpacs.”

In recent times, AOC has started ferocious debates over her “Tax the Rich” Met Gala dress. She and her colleagues Rashida Tlaib and Ayanna Pressley attempted to get president Joe Biden to choose someone other than Jerome Powell to lead the Federal Reserve. Biden ultimately chose Powell, but AOC wanted the U.S. president to choose a Fed chair that would address social change and the so-called climate crisis.

What do you think about AOC’s declaration that she doesn’t own bitcoin so she can remain impartial as a U.S. lawmaker? Let us know what you think about this subject in the comments section below.

Bank of Russia Rejects Provision of Crypto-Related Financial Services

Bank of Russia Rejects Provision of Crypto-Related Financial Services

Russia’s central bank has voiced opposition to the provision of financial services related to cryptocurrencies. The monetary authority believes such offerings would go against the interests of Russian investors as they are highly risky.

Central Bank of Russia Unwilling to Allow Financial Services for Crypto Assets

The Central Bank of Russia (CBR), known for its hardline stance on the legalization of cryptocurrencies, has dismissed a call by members of the financial sector to authorize the provision of crypto-related services. The regulator announced its position during a meeting with representatives of the industry, held to discuss the prospects for the development of the Russian stock market.

According to a recently published announcement, the financial businesses raised the question of allowing crypto investment in the Russian Federation. Responding to their suggestion, the monetary policy regulator stated:

According to Bank of Russia, the provision by financial institutions of services related to operations with crypto assets and derivatives on such assets does not meet the interests of investors in the financial market and carries great risks.

The press release further reveals that the central bank has also turned its back on the industry’s proposal to expand the practice of issuing Russian financial instruments in foreign fiat currency.

Bank of Russia has consistently maintained a conservative view regarding the status of the Russian ruble as the only legal tender in the country which it wants to preserve. The CBR remains opposed to permitting the free circulation of bitcoin and the like as well as their use in payments.

The monetary authority has often referred to cryptocurrencies as “money surrogates” which are banned under current Russian law. It’s also working to develop and issue its own digital ruble with trials expected to begin as early as January 2022, after the completion of the platform’s prototype by the end of this year.

While cryptocurrencies remain only partially regulated in Russia through the law “On Digital Financial Assets,” which went into force in early 2021, their popularity as an investment option has grown significantly. Survey results released by the CBR have shown that cryptos and other alternative assets form over half of the portfolio of non-qualified Russian investors.

In July, Bank of Russia advised domestic stock exchanges to avoid the trading of financial instruments tied to crypto assets and their prices. Their listing “entails increased risks of losses for people who do not have sufficient experience and knowledge,” the authority warned.

The bank also insisted that asset managers should not include cryptocurrencies in mutual funds and called on brokers and trustees to refrain from offering “pseudo-derivatives with such underlying assets to unqualified investors.” Russian lawmakers are considering restrictions on the funds private investors may put into crypto.

Do you think Bank of Russia can change its stance on crypto investment in the future? Share your expectations in the comments section below.

Huobi Research Report ‘Taper Landed’ Paints Bleak Picture for Cryptocurrency Assets

Huobi Research Report 'Taper Landed' Paints a Bleak Picture for Cryptocurrency Assets

A report issued by the Huobi Research Institute, the investigative arm of the Asian exchange, examines the effect that upcoming changes of U.S. Federal Reserve policy could have on the price of cryptocurrencies. The report, titled “Taper Landed: The Turning Point of The Cryptocurrency Market is Coming,” states that due to the upcoming tapering, the continued growth of high-risk assets (including cryptocurrency) could be difficult to maintain.

Huobi Report Examines Fed Taper Effects

Huobi Research’s latest report, titled “Taper Landed: The Turning Point of The Cryptocurrency Market is Coming,” establishes the possible route cryptocurrency prices could take due to the action of the Federal Reserve taper. The taper — that is, the continual reduction of dollar liquidity in the market due to reduction in bond purchases — could negatively affect the growth of bitcoin and other assets.

The taper discussion started months ago, and according to study forecasts, it could start next June, with a reduction of the purchases of bonds and the end of quantitative easing (QE). This reduction is expected to hit not only bitcoin, but also high-risk assets first, and its effect to move down to more established assets later.

End of Stock-to-Flow

“Taper Landed” also takes a few jabs at the well-known stock-to-flow (S2F) model, which predicts the rise of bitcoin’s price based on its availability and production in the market. The report, which was written on November 24, predicted this model would fail due to its limited consideration of economic elements surrounding bitcoin. William Lee, of Huobi Research, explained:

Why does the “victorious” bitcoin S2F model suddenly fail? Because Plan B only considered the monthly SF ratio of bitcoin and historical bitcoin price data when constructing the model, but ignored the impact of external macro changes on the market.

Lee further explains that the growth in bitcoin’s price has to do with the loosening of economic policies that the U.S. and other governments undertook, ostensibly to save the market during the coronavirus pandemic. But with the start of the so-called taper, and the upcoming interest hike that normally happens after taper periods, this bubble in stock growth and cryptocurrency price hikes could pop next year, according to the report.

If the taper process accelerates, these effects could be felt even more quickly on the market, the study concludes.

What do you think about Huobi Research Institute’s taper study? Tell us in the comments section below.