Connect with us

News

Uganda’s financial Intelligence classifies crypto service providers as accountable persons in the new AML amendment

Published

on

Uganda’s Financial Intelligence Authority (FIA), on 10 December, 2020, released a press statement via their Twitter handle, stating that it has amended the country’s 2013 Anti-Money Laundering Act through an Act of Parliament to classify Virtual Asset Service Providers (VASPs) as Accountable Persons.

As contained in the document released, “Accountable Persons” are persons or businesses that might be used as channels to launder money or promote terrorism which are listed in the second schedule to the the Anti-Money Laundering Act (AMLA), 2013.

In 2020, Uganda’s government through its parliament, strongly advised the general public to stay away from cryptocurrencies. This statement was fuelled by the concurrent ponzi schemes associated with cryptocurrency in the country. David also said that the masses should only do their business transactions with only licensed financial institutions.

This led to parliament members to raise their views and opinions concerning cryptocurrency and most of the members calling for its total ban of cryptocurrencies and related digital assets. One of the parliament members, Hon. Jovah Kamateeka clearly states that the youths should value hard work and to avoid being scammed by a computer.

Also, the State Minister of Uganda, Hon David Bahati also hinted on a possible regulation of cryptocurrency and digital assets coming soon. David said:

“The Second Schedule of the Anti-Money Laundering Act, 2013 is also being amended to include virtual assets providers on the list of accountable persons. This will bring virtual assets service providers including providers of cryptocurrencies to be brought under the purview of the Financial Intelligence Authority and will be required to adhere to reporting requirements under the Act.”

CryptoSavannah, a top company in East Africa, whose name was among the companies wrongly mentioned as running a fraudulent ponzi scheme. The CEO, Kwame Ruganda speaks on the misinformation and misunderstanding of cryptocurrencies and his related digital assets as ponzi schemes and scams. He said that the parliament members have represented this misinformation about the whole idea of Cryptocurrency. He further mentioned, CryptoSavannah is a technology business that develops blockchain solutions and not pyramid ponzi schemes. Also, CryptoSavannah is part of the Blockchain Association of Uganda.

Prior to the parliament sitting, the Blockchain Associations of East Africa consisting of Kenya, Uganda, Rwanda and Tanzania jointly released a press statement regarding the recent crypto scams and ponzi schemes affecting the East African region in December, 2019.

They clearly explained:
What is a cryptocurrency?
What is a CryptoSavannah used for?
Are they legal and how are they regulated?
What are Ponzi Schemes, and how can they be recognized?
How can the public differentiate a cryptocurrency from a ponzi scheme?

The New Amended Act by the FIA explains that Cryptocurrency Exchanges(s) and Virtual Asset Service Providers (VASPs) are now under the jurisdiction of the Financial Intelligence of Authority (FIA).

The Amendment states that any individual or institutions that conduct one or more of the following activities listed below on behalf of another person or institution, is required to be registered with the Financial Intelligence of Authority (FIA) before 27th December, 2020.

The exchange between virtual asset and fiat currencies,
The transfer of virtual assets,
The safekeeping or administration of virtual assets or instruments enabling control over virtual assets,
The participation in or provision of financial services related to an insurer’s offer or sale of a virtual asset.

Also, under amended Anti-Money Laundering (AML), 2013. Cryptocurrency Enthusiasts and Players are fully expected to keep detailed records, undergo Know Your Customer (KYC) and report suspicions and huge cash transfer or transactions. If it is an institution, they must offer Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) training programs to their employees and putting in place internal controls, procedures and policies with measures for detecting and preventing money laundering and terrorist financing.

The new amendment comes barely one year after LUNO, an African Exchange started full operations in the Country and two months after Binance announced his closure in Uganda.

Comments
Continue Reading
Click to comment

Leave a comment:

Crypto Assets

Crypto prices drop as global market fear increases

Published

on

Top cryptocurrency prices have fallen amidst a drop in stocks and fears over China’s Evergrande debt crisis. In the last 24hour, Bitcoin dropped from $47,772 to $42,630 shedding about 8.58%. this is the lowest in price since another bull run began on Sept 5 after the April crash.

El- Salvador’s President, Nayib Bukele sees the fall as an opportunity to invest more. Recall that the country adopted Bitcoin as a legal tender on September 7. Despite the adoption, the price of Bitcoin has fallen by almost 14% since then.

Other coins have experienced dramatic crashes within the last 24hours. Solana, a coin that has experienced 355% growth within the last 3 months fell from $162 to $130 shedding about 11.39% within the last 24hours. Solana’s fall may be categorized by the 17-hour outage which the founder, Anatoly Yakovenko said was caused by bots “flooding the networks”

Ethereum fell by 9.37% while Dogecoin and Axie Infinity fell by 11.22% and 14.14% respectively within the last 24hrs hours. While crypto experiences dark Monday, El-Salvador keeps investing more money in Bitcoin.

A look at the global market

The global market is experiencing fear due to the Evergrande debt crisis. A report published by the University of Michigan shows that consumer’s sentiment is beginning to decline. This trend alone may impact the crypto market as well.

On the other hand, the global market downturn must have been spurred by the Evergrande debt crisis. The company grew to be one of China’s biggest companies by borrowing more than $300bn. Last year, Beijing made rules to control the debt owed by big real estate developers. This led Evergrande to offer its properties at major discounts to raise more money to keep the business afloat. Right now, the company is struggling to meet the interest on payment of debts.

Why would it matter if Evergrande fails?

The collapse of the multi-million dollars company would affect the global market; including the crypto market. Many people bought properties from Evergrande and they expect to make gains. If Evergrande falls, crypto investors will be forced to withdraw more money to keep their business running without the means to invest more. When one business fails, the other gets affected indirectly. This also applies to other firms that do businesses with Evergrande.

The potential impact on China’s financial system is another effect of Evergrande’s fall. In his statement to BBC, Mattie Berkink, the Economist Intelligence Unit (EIU), said that “the financial fallout would be far-reaching. Evergrande reportedly owes money to around 171 domestic banks 121 other financial firms” if the company fails, other lenders or businesses may be forced to lend less. Thereby leading to a credit crunch- a situation where companies struggle to borrow money.

Comments

Decentralize Daily

From Crypto and Blockchain to AI, Fintech and Web 3.0 delivered twice in a week (Mondays and Fridays)

Continue Reading

Bitcoin in Africa

The rise of CBDC in African economies

Published

on

Many nations have taken cues from the world of crypto and its resounding successes over the last decade. In order to avoid getting left behind, governments worldwide are increasingly turning their attention towards implementing some form of digital currency, a CBDC which in full is Central Bank Digital Currency. Although inspired by cryptocurrencies, CBDC’s are quite different from traditional crypto platforms. The main differences are that CBDC’s are unlikely to be decentralized, the supply of this currency regulated by the host’s country’s central bank as the CBDC is designed to operate as a sovereign legal tender, the digitized form of the host country’s fiat currency. Thus, a central bank may issue digitized tokens of its currency of which their value is pegged to the fiat currency of the nation in question, making CBDC’s stablecoins.

Africa has seen a rise in the use of cryptocurrencies and it’s still pushing frontiers in this sector. Although the use of crypto in many African nations is becoming more and more pervasive by the day, the tone of governments in many of these countries toward the sector is cautious at best and threatening at worst. However, a few nations have voiced interests in creating digitized versions of their legal tender to function as a CBDC. Amongst these are Ghana, Nigeria, Morocco, Kenya and Tunisia.

Many of these projects are still in the research phase or developmental phase however. A good example is Ghana’s proposed CBDC, the E-cedi being developed in partnership with German company, Giesecke + Devrient. Nigeria’s CBDC project, the eNaira has been announced and according to Nigeria’s central bank, this CBDC will be launched sometime in 2021. To that end, the CBN has partnered with fintech company, Bitt Inc. to serve as the technical partner in the eNaira’s development. Reportedly, the CBN had made the decision to digitize the Nigerian Naira in 2017.

While the pursuance of digital currencies in African nations is a welcome development, implementation of these schemes isn’t without challenges. Chief among the issues countries in Africa face would be the already existing financial service inequality and poor penetration of internet access in the continent. These challenges must be tackled in order to allow for mainstream adoption of CBDCs and the subsequent provision of financial inclusion. The benefits largely depend on the peculiarities of the nation deploying them. For instance, a digital currency is thought to help Nigeria increase foreign remittances, it’s second largest source of forex after oil. Whatever the outcome of these projects, it is becoming apparent that CBDC’s have come to stay.

Comments
Continue Reading

Decentralize Brief

Bitcoin trades above $51k ahead of El Salvador’s adoption

Published

on

Bitcoin growth

Bitcoin price has rallied above $51,000 ahead of El Salvador’s adoption. The immediate surge in price may be due to the social media campaign that everyone should buy sats of Bitcoin to support El Salvador’s plan to make the coin a legal tender or it may be due to the news of El Salvador’s adoption of the coin as a legal tender on September 7. Users of social media platforms like Twitter and Reddit are discussing how they will buy Bitcoin of $30 each to mark the new El Salvador Bitcoin law.

The surge in Bitcoin’s price began in the last 24hrs with the price rallying around $51,955 with a 3.37% increase. This is an all-time high after the April crash that brought the price of Bitcoin from $64k down to $28k. The move by El Salvador to be the first country that accepts Bitcoin as a legal tender and the social media campaign that leads to a surge in price ahead September 7 are a repetition of events that occurred late last year and early this year with regards to institutional investors and how the price of Bitcoin skyrocketed.

El Salvador, a country in Central America, has been preparing heavily to adopt Bitcoin by installing ATMs to allow citizens to convert the token into US dollars. Last week, the country’s Legislative Assembly passed a law to allow for the creation of a $150m Trust to support the conversion of Bitcoins to US dollars.

To promote the use of Bitcoin, the government states that it will give the adult population of El Salvador $30 in Bitcoin once they download “Chivo” the wallet issued by the government. This was confirmed by the Finance Minister, Alejandro Zelaya.

What this means for Bitcoin investors

Apart from the adoption by Salvadorians, on-chain analytics show that Bitcoin is in high demand. The fourth halving that occurred will make Bitcoin become a scarce token in the nearest future. Thereby increasing the price sporadically.

With El Salvador’s interest in Bitcoin, other countries are likely to follow suit- Panama is considering following El Salvador’s lead. History will repeat itself as this development will serve as another crypto rout that occurred early this year when Tesla and MicroStrategy announced their support for Bitcoin.

El Salvador’s new law allows the use of Bitcoin as a legal tender it can be used to buy goods, pay for taxes and bank loans. This means more demand for Bitcoin, with the fourth halving that occurred, it means less supply. A common rule of economics for demand and supply will apply. Prices are projected to keep rising. At the time of writing this report, Bitcoin is trading at $51,839 with a projection of $52k before the end of today and higher tomorrow when Salvadorians begin to use the token.

Comments
Continue Reading

TRENDING

%d bloggers like this: