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South African retail investors who speculate in crypto assets should ensure that the platform they use to buy and sell digital tokens like bitcoin or ethereum are licensed with the Financial Sector Conduct Authority (FSCA) or risk being scammed.
The financial conduct regulator released its South African crypto market study on Thursday in which it said it remains of the view that crypto asset-related activities pose significant risks to financial customers, particularly at the retail or consumer level. While a legal framework is in place the FSCA said it was not necessarily tailored around crypto assets services providers and the specific risks they posed, highlighting the need for South Africa to further refine its regulatory framework to address crypto-specific risk.
"For the retail consumer, for the retail market, you must make sure that the financial product service provider that you’re conducting business with it must be licensed and authorised by the FSCA," Katherine Gibson, deputy commissioner of the FSCA, told media in a webinar on Thursday. "If it is not, you run a really big risk of being scammed. That risk is amplified in the digital space and we see so much of it in the crypto space as well."
