South Africa’s Financial Sector Conduct Authority is sounding the cryptocurrency scam alarm once again.
In a press release issued on Thursday, the FSCA enjoined the public to do their own due diligence before investing in any crypto-related project.
According to the FSCA the high-risk nature of the crypto investment space is being further exacerbated by the multitude of elaborate cryptocurrency scams in the country.
Indeed, as previously reported by Cointelegraph, the spate of crypto scams in South Africa is pushing the authorities towards stricter regulatory control over the industry.
Back in January, interim liquidators of an alleged South African Bitcoin scam called for an expanded mandate to probe the suspected multi-level marketing scheme. In August 2020, the FSCA had warned investors to avoid Mirror Trading International, the company at the heart of the fraud investigation.
Commenting on the apparent herd mentality targeted by these crypto scams, the FSCA in its communique stated, “Do not be pressured to go with the flow and do not be afraid of being left out of the ‘next big thing.’”
The FSCA also revealed that it was working towards regulating some parts of the crypto space in collaboration with the country’s Intergovernmental Fintech Working Group. Back in December 2020, the FSCA already classified cryptos as financial products.
Meanwhile, the country’s tax agency is tightening its crypto tax compliance monitoring activities. Reports indicate that the South African Revenue Service, or SARS, has issued audit requests to taxpayers with cryptocurrency-related queries attached.
Like the infamous “crypto question” introduced by the U.S. Internal Revenue Service, the SARS crypto query is seeking information about the purpose for which investors bought virtual currencies as well as trading data from exchanges.
The move likely signals SARS’s intentions to prosecute crypto investors who either fail to declare their crypto trades or misrepresent the value of their virtual currency-related activities.