South African Financial Regulator, FSCA, Issues a Second Crypto Warning Amidst Increasing Crypto Asset Losses Among Consumers in 2021

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The Financial Sector Conduct Authority (FSCA) has issued a second crypto health warning folllowing increasing volume of crypto assets (cryptos) related lossed suffered by financial consumers.

The latest crypto warning follows an earlier cautionary press release on crypto-related investments publihed on February 4, 2021 by FSCA after a number of complaints on the loss of savings in digital assets.

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In regards to the latest warning, the regulator has said:

“The FSCA would like to emphasise, crypto-related investments are not regulated by the Authority or any other body in South Africa. As a result, if something goes wrong, you are not likely to get your money back and will have no recourse against anyone.”

                        – FSCA

According to FSCA, the high risks already inherent in cypto assets has been further compounded by scam activity as well as unregulated firms targeting consumers highlighting the rewards, but not the potential downsides of investing in crypto.

FSCA has also revealed that it is working on regulating certain aspects and players in the crypto asset space that will be rolled out during the coming months.

The regulator has also specifically highlighted retirement fund trustees to remain vigilant in their fiduciary responsbility before mandating investment managers to expose their fund assets to risks asociated with crypto assets.

“The FSCA currently discourages such investments by retirement funds until regulation has been finalised to safeguard investors.”

                          – FSCA

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Read / Download the press release warning here.

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