Tax Consulting SA in South Africa claims that recent revelations from the central bank deputy Governor that his institution plans to regulate cryptocurrency within 12 to 18 months means that cryptos ‘will soon become regulated under Financial Advisory and Intermediary Services Act (FAIS). Accordingly, all individuals or organizations that provide advisory or intermediary services will need to register with the relevant authorities as financial service providers.
Tax Consulting SA shared a report with Bitcoin.com News that predicted that the SARB would introduce Know Your Customer (KYC), procedures and exchange control regulations. However, the consulting firm quickly pointed out that the South African Reserve Bank, (SARB), ‘will not interfere with the investment decisions made crypto investors.
Instead, the central banking will issue so-called “health warnings” and provide adequate protection for investors who are at high risk of losing their entire portfolio. Although the SARB does not ban cross-border crypto trading or investment, the consulting firm says that investors must still adhere to certain reporting standards.
In the interim, the report by the tax firm warned about possible tax implications which crypto investors should be aware of. According to the report:
A second concern is tax compliance. For example, tax evasion with transactions falling within the scope of the SARB’s Financial Intelligence Centre will be easier to detect.
The report concludes that once the regulatory framework has been established, non-compliance can be easily detected and South Africa’s wild west crypto industry will cease to exist. Tax Consulting SA warns that crypto investors must ensure they comply with all obligations during the period before the regulation is implemented.