South African financial markets regulator, the FSCA is warning investors to be wary of crypto investment scams amid the current crypto bull market.
February 4, 2021 | AtoZ Markets – The Financial Sector Supervisory Authority of South Africa (FSCA) is again sounding a warning against cryptocurrency scam. According to Thursday’s press release, the FSCA enjoined the public to do their own due diligence before investing in any crypto-related project.
FSCA warns investors to be wary of crypto scams
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 South Africa.
“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 press release read.
Indeed, the spate of cryptocurrency investment scams in South Africa has pushed the authorities towards making 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. As AtoZ Markets reported, 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 November 2020, the FSCA already classified cryptos as financial products.
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