The Financial Sector Conduct Authority (FSCA), issued a warning on 2 February 2021 against the growing cryptocurrency scams in the country. “The FSCA is receiving a large number of complaints from South African investors who have lost their savings through investing in a crypto-related investment that they did not understand, or a scam packaged as a crypto investment promising unrealistic high returns.”
The FSCA points out that, currently, crypto-related investments are not regulated by the FSCA or any other body in South Africa. As a result, if something goes wrong, investors are unlikely to get their money back and will have no recourse against anyone.
“The high risks already inherent in crypto assets is further being compounded by scam activity, as well as unregulated firms targeting consumers with marketing material that highlights the rewards, but not the potential downside, of investing in crypto assets. The FSCA is working at finding measures to regulate certain aspects and players in the crypto asset space.
Click here to download the FSCA media release that details the financial risks involved.