A looming regulatory clampdown following a major Ponzi scheme's collapse is already prompting some exchanges to flee abroad.
Fear of a regulatory clampdown in South Africa is driving cryptocurrency startups to look to more friendly environments.
Some crypto exchanges have already made the decision to go, Bloomberg reported Monday.
For example, Revix is shifting its head office to the U.K. and also planning a Germany-based location.
The Financial Sector Conduct Authority (FSCA) is seeking to regulate cryptocurrencies with more power to prosecute fraudsters, Head of Enforcement Brandon Topham told Bloomberg in January.
The looming changes come after the collapse of Mirror Trading Investments (MTI) in December 2020, which had collected over 23,000 bitcoin (BTC, +1.2%) from investors before its CEO allegedly fled to Brazil.
Regulators will focus on better protection for consumers rather than businesses, according to Topham, who added more proposals are expected in coming months.
Until now, authorities in South Africa have been “incredibly slow in terms of regulation,” according to Sean Sanders, CEO of Cape Town-based Revix.
This stymies growth as customers “arrive at our platform with skepticism,” he said.