South Africa is arguably the most fervent supporter of the cryptocurrency industry. The support may not come directly from the government or private companies, but it does indeed come from the population itself.
According to Google Trends, South Africa is one of the most interested countries in topics like Bitcoin, Blockchain, Cryptocurrency and etc. The country is almost completely devoted to this financial market.
However, one major issue that the locals face is a complete lack of crypto exchanges. There are very few or no crypto exchanges to speak of in the country, which makes regulation quite hard to deal with. How do you stop locals from registering with offshore crypto exchanges? How do you make these offshore exchanges comply? How do you actually track where your citizens are trading?
These are the questions that the FSCA (South Africa’s financial regulator) had to ask itself, and so far, not that many answers have surfaced.
Some Solutions Have Been Found
According to 55brokers, a Forex news outlet, and broker reviewer, there are quite a lot of Forex brokers stationed in South Africa or trying to target this market in some way. The crypto attention is most definitely a significant part of the trader market, but crypto is slowly catching up, thus forcing all of the popular fx brokers in South Africa to somehow diversify into the blockchain market.
There is already evidence of this happening in the country. If we take a look at this nsbroker review it becomes quite clear that most brokers are starting to feature cryptocurrencies in some way on their platforms. It doesn’t matter if it’s direct or indirect (CFD) trading, customers are simply piling in to somehow get their hands on the crypto markets.
This was actually a positive thing for the South African government. As long as people were diverting to regulated and trusted companies for their crypto trading needs, they were safe from numerous scams happening within the country.
But this tendency could potentially birth a new breed of scammers, and it’s already taking place.
FX Safety Trumped By Adapting Fraudsters
It’s commonly known that safety and confidence in something tend to make people a bit less attentive and careful. Every company that was saying that they served South Africans was considered legitimate, sometimes without even checking their backgrounds.
Therefore, many firms appeared with very strong marketing campaigns. So strong even that when the FSCA advised against registering with them, the populace simply didn’t listen. Even after blacklisting these companies, some traders just couldn’t ignore promises of huge leverage and lower margin calls.
The good news, however, is that after a few cases of traders being defrauded by these companies, people learned to avoid them and sank back into offshore crypto exchanges.
Not much may have changed in the country itself regarding FX brokers as they were able to retain their reputation, but when it came to crypto exchanges. They found the South African government a lot more lenient towards allowing offshore companies to operate on their territory.