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Thread: Bitcoin, FICA, SA Regs

  1. #1
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    Question Bitcoin, FICA, SA Regs

    Helo. Does anyone have information with regards to regulations / compliance of exchange of "virtual currencies" (like Bitcoin) in South Africa as a company or individual. I don't see anything on the FICA website. I'm not sure how it could ever be regulated giving the nature of Bitcoin, but anyway...

    All I could find was the following excerpt from Wikipedia referring to regulation of virtual currency in United States by FinCEN. Does anyone have info on any similar regulations that have to be adhered to in SA? Or how how current regulations could apply to exchange of virtual currencies?

    Quote Originally Posted by Wikipedia
    On 18 March 2013, the Financial Crimes Enforcement Network (or FinCEN), a bureau of the United States Department of the Treasury, issued a report regarding centralized and decentralized "virtual currencies" and their legal status within "money services business" (MSB) and Bank Secrecy Act regulations.[38] It classified digital currencies and other digital payment systems such as bitcoin as "virtual currencies" because they are not legal tender under any sovereign jurisdiction. FinCEN cleared American users of bitcoin of legal obligations by saying, "A user of virtual currency is not an MSB under FinCENís regulations and therefore is not subject to MSB registration, reporting, and recordkeeping regulations." However, it held that American entities who generate "virtual currency" such as bitcoins are money transmitters or MSBs if they sell their generated currency for national currency: "...a person that creates units of convertible virtual currency and sells those units to another person for real currency or its equivalent is engaged in transmission to another location and is a money transmitter." This specifically extends to "miners" of the bitcoin network who may have to register as an MSB and abide by the respective requirements of being a money transmitter if they sell their generated bitcoins for national currency and are within the United States.[36]

    Additionally, FinCEN claimed regulation over American entities that manage bitcoins in a payment processor setting or as an exchanger: "In addition, a person is an exchanger and a money transmitter if the person accepts such de-centralized convertible virtual currency from one person and transmits it to another person as part of the acceptance and transfer of currency, funds, or other value that substitutes for currency."[37][38]

    In summary, FinCEN's decision would require Bitcoin exchanges where bitcoins are traded for traditional currencies to disclose large transactions and suspicious activity, comply with money laundering regulations, and collect information about their customers as traditional financial institutions are required to do.[47][48]

    Patrick Murck of the Bitcoin Foundation criticized FinCEN's testament as an "overreach" and claimed that FinCEN "cannot rely on this guidance in any enforcement action".
    PS. If you feel the need to tell me how Bitcoin will fail or the Bubble that's going to burst, please start a new thread somewhere else. I just need the info described above, thanks people.

  2. #2
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    I just opened a trader account with and had to go through a validation process including submitting my ID and one month's bank statement. This is know as KYI process (know your identity) and is part of law with regards to financial service providers in South Africa.

    Does anyone else have experience with trading in Bitcoins?

  3. #3
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    I just saw this question for the first time this morning…it was posted on 30 April 2013 by “flin”.

    Today is 23 September 2017 and I thought:

    Wow - a lot happened since April 2013 on the Bitcoin front. And why did FLIN mentioned the Bitcoin bubble? What happened back then? And what is happening to Bitcoin today – right now?

    Here are a few highlights:

    In January 2013 the Bitcoin price was $13.

    In February 2013 the price of Bitcoin started to increase and in early April reached a new high of $240

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    But by the end of April 2013, the price per Bitcoin dropped back to $85. It went up again to about $150 in May and dropped to around $75 in Jul 2013.

    Four years later - 01 September 2017: The price of Bitcoin came within touching distance of $5,000 earlier today.

    05 September 2017: In The News: Speculation is rife that the Chinese government is launching a crackdown on Bitcoin, prompting traders to sell. And this comes after China earlier decided to ban initial coin offerings.

    These two moves signal a marked hostility towards bitcoin and other crypto-currency in the world.

    Click image for larger version. 

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    The Bitcoin price drop to $3200 but bounce back a little and then drop again. This morning, 23 September 2017, the price of Bitcoin stands on $3708

    THE BIG QUESTION IS? What is going to happen to Bitcoin and other Crypro-Currencies?

    The truth is - I don't know - but I can tell you this...

    The only way to find answers is to ask questions and learn more.

    THAT is exactly what FLIN tried to do back in April 2013. He wanted to know more!

    Today it is easier: You can grab this free e-book now!

    Click image for larger version. 

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    this e-book is called: How To Make Money With BITCOIN and Other Crypto-Currencies.

    Here is THE LINK TO DOWNLOAD the ebook while it is still free.

    It is a gift for the South African Chamber of Entrepreneurs (SACE).


    My message to FLIN....and in fact, a message to all of us: Sometimes you need balls to ask questions and to make a choice.

    Dear Flin - thank you for this question....

    I hope you found your answers back in 2013 , but most of all, I hope you bought a few bitcoins at $75.

    FOR FUN - help me to do this calculation:

    If you bought R10 000 of Bitcoins at its lowest price in May/Jul 2013 [just after you posted this question] you would have been able to buy about 14.5 Bitcoins with your R10 000. [The ZAR/U$ exchange rate was R8.98 VS $1]

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    14.5 Bitcoins sold at it's highest point in September 2017 would have give you $71 630.

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    At today's U$/ZAR exchange rate of R14.46 your small R10 000 would have made you a millionaire
    [In fact - before commissions and other costs you would have banked: R1 035 769]

    Flin, I truly hope you followed your gut feelings and dreams and bought those bitcoins. [and sold them....]

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