The cryptocurrency industry is in need of a regulatory body or managing committee. This is according to CEO of Bitmart, Jacques Serfontein who recently took to the air and called for the cryptocurrency regulations so that people could not lose millions due to fraudulent Initial Coin Offerings (ICOs) or other related activities.
Initial Coin Offerings
Speaking to Radio Pretoria, Serfontein said the crypto industry is very broad and there are hundreds of new ICOs popping up.
“There is an opportunity for companies to commit fraud and for this reason, the industry needs to be regulated. It has become very simple to create an ICO. All you need is a good programmer, a whitepaper and a good idea based on blockchain technology. The reality is that these ICOs must deliver on what they promised in their whitepapers,” said Serfontein.
He used the example of someone starting a rubbish removal company and offering 500 million coins at $1 each. “It is important to establish if the company will be able to give ICO token holders a return on their investment. They still need to generate a profit for themselves. This sector of the crypto industry has to be regulated to such an extent that there is no room for fraud,” said Serfontein.
Cryptocurrency regulations to attract investors
A second reason why Serfontein says the crypto industry needs to be regulated is so that it may earn the trust of conservative investors and financial institutions.
“Once financial institutions make the crypto market accessible to their clients, we will see the price of cryptos go through the roof. The problem is that there is currently no Fica regulations in the crypto space. There are many conservative investors who have millions and even billions to invest. They will only invest these funds in cryptos once the industry is regulated,” said Serfontein.
He also said that proper and fair regulations would see the market stabilise.
Pay the taxman
Serfontein urged crypto holders to pay their due diligence and abide by taxation law.
“One can easily make 1000% gain on an investment in the crypto market. You are mistaken if you think that you can get away with not paying taxes. You would never see that kind of gains from a more traditional form of investment, so pay the tax man what he asks. Cryptocurrencies are not intended for tax evasion, but presents an opportunity for one to make money. Enjoy the benefits but declare your taxes. It will contribute to the growth of the economy and will put the industry in a positive light.”
Serfontein said it will be easier for government entities such as the South African Police Service (SAPS) to track down cybercriminals.
“If your account has been hacked It becomes a problem. The exchanges pull up their shoulders. The reality is that hackers leave footprints on the blockchain which can be traced. Currently, the SAPS cannot necessarily help one when your account has been hacked if you wish to report a case. The truth is that these exchanges should investigate the incident. Crypto holders should know if the exchange was indeed hacked and also to establish where the money went to,” said Serfontein.
Serfontein said it is very important for cryptocurrencies to be regulated to stop people from losing money in this regard.
To listen to the full interview of Jacques Serfontein on Radio Pretoria in Afrikaans, click here.
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