It happened in Nigeria, and now there’s a possibility it’ll happen in Uganda as well. Due to the nature of cryptocurrencies, a range of countries are attempting to restrict it or outright ban it, rendering it illegal. A call for crypto regulations in Uganda has been made by the Financial Intelligence Authority to the Ministry of Finance.
Citing scams and other crimes, a call for crypto regulations in Uganda has been made
The Financial Intelligence Authority has made a call for crypto regulations in Uganda by asking the Ministry of Finance to come up with a framework to help regulate cryptocurrency operations in the country. It has been a belief that cryptocurrency can easily be used as a malicious tool to aid money laundering and terrorism financing and hence needs to be regulated to fish out those using it with ill intent.
Speaking to a group of organizations in Kampala, Uganda, Mr Sydney Asubo, Executive Director, FIA Uganda, said, “Virtual assets service providers (VASPs) are now in category 16 of the most vulnerable to terrorism financing and money laundering. Last year we gave them one month to register but only a few responded,” he said, noting many cryptocurrency operators continue to operate illegally, which makes it difficult to regulate their activities.”
At a time when cashless transactions are slowly becoming the norm, cryptocurrency has taken the world by storm citing a boost in the numbers of users since the start of the pandemic as many took it upon themselves to get educated about how cryptocurrency works.
The Financial Intelligence Authority maintains that without any regulations in place, Ugandans will continue to be victims of scams. A call for crypto regulations in Uganda will ensure that these entities are being monitored and hence making it easier to identify the genuine ones.
However, the FIA director revealed that several VASPs continue to operate illegally, with only a few platforms electing to register with the AML watchdog.
For Asubo, the FIA’s inability to maintain strict oversight on crypto exchanges and VASPs, in general, was a blow to the agency’s desire to regulate the country’s cryptocurrency sector. “Virtual assets service providers are now in category 16 of the most vulnerable to terrorism financing and money laundering,” Asubo added.
Late last year, the Financial Intelligence Authority of Uganda (FIA) amended the 2013 Anti-Money Laundering Act through an act of Parliament to include Virtual Asset Service Providers (VASPs) as Accountable Persons. It simply meant that cryptocurrency exchanges and virtual assets providers are now subject to the supervision and monitoring by the FIA.
Early this year, a cryptocurrency data analysis firm indicated that about 100,000 Ugandans investing in Bitcoin own over $1,000,000 worth of Bitcoin. There is no telling how a call for crypto regulations in Uganda could affect the operations of the cryptocurrency in Uganda and those that are currently trading in it.
A number of countries have regulated cryptocurrency while making it legally acceptable like the UK and Singapore. Cryptocurrency entities apply for licenses where they have to comply with anti-money laundering measures under the law in these said countries.
Read more: The top Fintech startups in Africa today