South Africa’s Financial Sector Conduct Authority (FSCA) has issued a public warning against two unlicensed cryptocurrency firms:
- AfriInvest, and
- MutualWealth
According to the FSCA, the companies are allegedly collecting funds from the public for investment purposes while offering unrealistic returns.
The warning follows reports that AfriInvest and MutualWealth have been guaranteeing returns of up to $542 (R10,000) per day. The firms claim to leverage artificial intelligence (AI) to deliver such returns and have also been accused of falsely using the names of prominent South African figures, including musician Steve Hofmeyr and Afriforum CEO, Kallie Kriel, to endorse their services.
In a statement released by the FSCA on March 28 2025, Hofmeyr, Kriel, and Maroela Media were reported to have denied any association with AfriInvest or MutualWealth.
“While the FSCA does not comment on the specifics of AfriInvest or MutualWealth’s business, it must be noted that these entities are not authorized under any financial sector law to provide financial services to the public in South Africa,” the FSCA said.
FSCA classified crypto assets as financial products requiring regulatory oversight in 2022, being the first African country to do so. According to the authority, this aims to protect consumers from the inherent risks associated with the crypto market, such as fraud and money laundering.
South Africa’s
Financial Regulator, FSCA, Declares Crypto Assets as a Financial Product
A crypto asset is used as an investment vehicle… and it resembles a financial product – you invest in it, you get returns from it.” – FSCAhttps://t.co/FOAe4pMmy3
— BitKE (@BitcoinKE) October 21, 2022
In July 2024, the regulator noted that financial customers in the country are at risk from ever more sophisticated technologies that are being deployed by fraudsters.
“With the advent of artificial intelligence and rapid software development, the FSCA has observed a surge in deepfake scams. Fraudsters use AI and other technologies to create fabricated, high-quality videos, images, audio, or text content that imitate public figures and successful business people to promote scams.
According to current crypto regulations, entities that continue operations without applying for registration could face a fine of up to R10 million or even a criminal conviction… pic.twitter.com/ducTAf16Ev
— BitKE (@BitcoinKE) July 8, 2024
In addition to unauthorised crypto-related financial services, other areas of heightened risk to financial customers in South Africa include:
- Non-compliance with anti-money laundering regulations
- Unlicenced over-the-counter derivative provider activities
- Copy trading and signals
According to current crypto regulations, entities that continue operations without applying for registration could face a fine of up to R10 million or even a criminal conviction and a prison sentence of up to 10 years.
Q&A | What FSCA Licensing for Crypto Assets Service Providers Means for South Africa – A Chat with #Binance Compliance
Below is the Q&A with Samukele Mkhize, Country Compliance Head/MLRO South Africa for Binance, regarding the FSCA’s licensing of crypto asset service providers… pic.twitter.com/qL62Gz8HE9
— BitKE (@BitcoinKE) April 25, 2024
The regulator is also prepared to shut down non-compliant firms.
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