South Africa Financial Regulator Issues Crypto Investment Warning

South Africa’s regulatory body, the Financial Sector Conduct Authority (FSCA) like other global regulators, has warned citizens to be wary of crypto investment schemes that sell hyperbolic returns on investment (ROI) amid crypto’s bull run. Meanwhile, the country’s tax body recently sent out requests to taxpayers to reveal crypto-related activities. 

FSCA Calls for Caution in Crypto Investment

The FSCA issued the warning via a press release on Thursday (Feb. 4, 2021). According to the South Africa financial regulator, citizens who engage with crypto investment schemes do so at their own risk.

Meanwhile, the FSCA’s warning comes as a result of complaints received from several aggrieved South African investors who lost funds through firms promoting rypto investments. These firms which are unregulated by FCSA promise investors hyperbolic returns.

The regulatory watchdog while highlighting the risks involved with crypto investment, advised consumers to be cautious. According to the FSCA, investors should seek proper investment advice before committing to crypto high yield investment programs (HYIPs). Also, avoid putting a large chunk of money into crypto investment and for traders not to “be afraid of being left out of the next big thing.”

However, FSCA is working on combating the fraudulent activities in the space, as well as regulating parts of the crypto industry. Part of its statement reads:

“It is for this reason that the FSCA is working at finding measures to regulate certain aspects and players in the crypto asset space. These measures will be rolled out during the coming months and we are working with other members of the Intergovernmental Fintech Working Group (IFWG) to better understand and regulate where appropriate crypto assets in South Africa.”

As previously reported by BTCManager back in April 2020  the IFWG stated that it was necessary to establish strict regulatory policies for the emerging crypto industry.

The FSCA’s warning is similar to a recent warning issued by the U.K. Financial Conduct Authority (FCA). Back in January, the FCA asked investors to be wary of firms promoting crypto investments, adding that consumers could incur serious losses.

South Africa Tax Agency Modifies Audit Request to Clampdown on Crypto Traders

Meanwhile, reports stated that the South African Revenue Services (SARS) has issued audit requests to taxpayers about their crypto-related trading activities. Part of the information required by SARS include reasons for buying crypto and also trading details from exchanges along with bank statements. The SARS audit request is similar to the U.S. Internal Revenue Services (IRS) question on part of its updated 1040 form.

Meanwhile, Tax Consulting South Africa, a tax consulting and advisory firm, stated that the change in SARS’ audit request means that the tax agency is looking to clampdown on non-compliant crypto traders in the country.

“It is feasible to understand that SARS is in the process of ensnaring culpable taxpayers who have not disclosed their cryptocurrency-related trading profits and / or losses.”

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Following GameStop, South Korea Financial Regulator Extends Ban on Short Sales

South Korean retail investors pointed to the U.S. GameStop saga to pressure local regulators to extend the country’s ban on short-selling stocks. They succeeded, at least for now. 

Then, GameStop happened. 

In January, retail investors in the U.S. banded together on Reddit to bet in favor of stocks (like that of American video game store GameStop) that certain Wall Street hedge funds were shorting. GameStop’s share price skyrocketed, forcing Wall Street investors to cover their losses by also buying the stocks, further boosting the price. 

U.S. retail traders were soon joined by eager small investors from all over the world. In South Korea, where retail investors dominate stock trading (accounting for 70% of the market), traders  drove around in a battle bus, covered in anti-short selling slogans. Around 30,000 Korean traders reportedly came together on an online forum to drive up the prices of stocks like Celltrion that are often targeted by foreign short-sellers. Some local politicians rallied behind retail investors who were calling for an extension of the ban.   

On Wednesday, Eun Sung-soo, Chairman of South Korea’s Financial Services Commission held a press conference, announcing that the ban was not only extended, but will only be partially lifted after May 2. The ban will still remain on over 2,000 stocks. 

“The partial resumption is intended to minimize the impact on markets, given these stocks have large market caps and liquidity so that the resumption of short-selling would have limited impact on stock prices,” the press statement said. 

Although local investors may have welcomed the temporary extension, this view is not shared by institutions around the world. On January 27, the International Monetary Fund (IMF) urged the country to lift the ban, now that the markets had stabilized. 

According to local media, on Wednesday, the Financial Times Stock Exchange (FTSE) reportedly sent a letter to regulators in South Korea warning them that it could revoke the nation’s classification as a “developed country” in the FTSE Equity Country Classification index should the ban remain in place. To qualify as a developed country, its equity market should permit short sales.  

In 2020, the Korean stock exchange was among the top 20 in the world in terms of market capitalization.



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FunFair (FUN) gains 183% as the blockchain-based gaming industry grows

Many DApps and blockchain-based games are designed with casino-style and RPG features that allow players to use cryptocurrency for gambling. 

FunFair is essentially a white-label, turnkey blockchain-based casino and the platform aims to provide services with zero set-up fees and no monthly minimums.

The platform’s native FUN token is the fuel behind every function on the FunFair platform and players need to use it to place bets, and winnings are also paid out in the same way. FUN tokens are used to compensate game developers and pay for fees and services to affiliates and within the game.

Since Jan. 28, the token has rallied by 183% and the move appears to be backed by the growth in users, amount wagered on the platform, and on-chain transfer volume.

FunFair (FUN) token / USDT at Binance. Source: TradingView

It is worth noting that FunFair itself is not a casino. Hence it only holds a testnet version (showcase) on their website. Nevertheless, they provide links to two real use cases which are both powered by its technology.

In June 2017, the ICO raised $26 million for 21.3% of all FUN tokens. Founders and advisors kept 14.4%, while the FunFair Foundation retained the remaining 64.3%. Since then, the Foundation decided has buned more than 6 billion tokens, reducing the max supply to 11 billion.

The team aims to offer transparency to prevent cheating from casino operators and players alike. By using peer-to-peer technology and smart contracts, FunFair can eliminate the usual required trusted third party.

The platform hosts classic games like virtual slot machines and Blackjack and FanFair Technologies and third parties are actively developing new games. The system is entirely browser-based using HTML5 and WebGL standards to deliver a smooth mobile experience.

Multiplayer games and second layer scaling

In October 2020 FunFair created a new business unit to explore multiplayer games and a distribution agreement was signed with EveryMatrix’s remote gaming server which is used by 600 casino brands globally. Shamrock Treasures was the first game launched using this technology and it is currently avaliable to third parties and approved by regulators.

FunFair has also integrated second layer solutions to reduce gas fees and its FunFair Wallet already supports xDAI. The L2 option will also serve as the base for the upcoming multiplayer games launch.

Daily active users soar

According to the FunFair blog, participation (gambling) has increased by 255% compared to the precious quarter, and the number of players grew by 140%.

Furthermore, several payment options such as Uniswap, Changelly, and Moonpay have been integrated into the FunFair Wallet.

On-chain data shows that activity started to pick up just ahead of the new year, surpassing 1,000 daily active addresses, while transfers recently reached $10 million.

FUN daily transfers and unique addresses. Source:

The only feature that seems to be a possible game-changer is the integration of MetaMask but FunFair’s roadmap does not show an exact date for this.

Meanwhile, social activity metrics from TheTie shows that FunFair’s recent growth and new product lines appear correlated with the token’s price appreciation.

FunFair (FUN) Twitter activity vs. price (USD). Source: TheTie

Blockchain-based gaming is a vast market and multiple analysts have said that the sector could develop into a multi-billion dollar market in the next few years.

FunFair’s blockchain transparency and its white label technology will likely be attractive features to game designers and these features alone seem to be the primary substance backing the recent rally.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.