Crypto Currency Regulations are the remit of The Interdepartmental Fintech Working Group (IFWG). Consequently, they released a policy position paper on crypto-assets for review and feedback by key stakeholders before 15 May 2020.
The position paper makes over 30 recommendations. Based on the recommendations iCE3 Exchange will be known as a Crypto Asset Service Provider (CASP).
iCE3 falls into two broad categories of CASPs:
A key outcome of this policy document is building a regulatory framework to oversee investments in and transactions using cryptocurrencies. Consequently, this means removing anonymous and secretive transactions.
iCE3 has been participating and making recommendations to the policy since the IFWG was formed.
A major recommendation is based on the Financial Action Task Force (FATF) and it calls for the implementation of the ‘travel rule’. This will require that iCE3 receives and passes on information about each transaction.
Here is the recommendation in more detail as per the position paper:
CASPs will be required to implement Recommendation 16 (‘the travel rule’) of the FATF Recommendations. Furthermore, the originating CASP should obtain and hold, required and accurate originator information as well as required and accurate beneficiary information of the crypto asset transaction, submit this information to the beneficiary CASP or another obliged entity. Also, this information must be made available on request to the appropriate regulatory and/or law enforcement authorities. The beneficiary CASP should obtain and hold, required and accurate originator information as well as required and accurate beneficiary information of the crypto asset transaction. Furthermore, they must provide this information to the appropriate regulatory and/or law enforcement authorities when requested to do so. A CASP does not have to attach or encode this information directly with the crypto asset transaction. Rather, they must transmit this information immediately and securely on request by the appropriate authorities.
The founder of iCE3, Gareth Grobler states:
Regulatory certainty is good for planning and future capital commitments. We are ready for any policy at iCE3.
The COO of iCE3 Exchange, Eugene Etsebeth was previously a key stakeholder in the South African Reserve Bank (SARB) and was chairman of the working group responsible for crypto assets. Now helping steer iCE3 into a regulated entity he says:
The crypto community and iCE3 have been very close to the regulators since inception in 2013. We have given technical assistance, operational assistance, and industry insights into how to create a safe and law-abiding policy for crypto assets.
Reducing the anonymity of service providers will subsequently reduce money laundering or criminal activity, un-monitored cross-border flow, tax evasion, and the financing of terrorism as the main problems facing regulators, the IFWG paper said.
iCE3 is already compliant and often surpassing the requirements of the Financial Intelligence Centre (FIC) in terms of Know Your Customer processes. The recommendations position paper talks to crypto assets as a currency, and treating it like any other foreign currency and the SARB requested the finance minister to amend the exchange control regulations to include cryptocurrencies. In conclusion, cryptocurrencies are maturing from a self-regulated domain to a regulated one where individuals and businesses can introduce aspects of crypto assets into their daily lives – with investments and payments.
CASP will no doubt need to comply with any regulations acted into law. This will bring clarity and direction to established operators and new ventures. It will further benefit operators looking to secure funding. As a result, a well thought out and progressive policy will also encourage investment into the South African economy and create more opportunities for local businesses to flourish.
This article is intended to educate and should in no way be seen as investment advice or an enticement to use the ice3x.com platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.