FSCA Warns: Two Unlicensed Crypto Firms Promise Unrealistic Returns
The Financial Sector Conduct Authority (FSCA) in South Africa has issued a stark warning against two unlicensed cryptocurrency firms, AfriInvest and MutualWealth. These companies are allegedly collecting funds from the public, promising unrealistic returns of up to $542 (R10,000) per day.
The FSCA has classified crypto assets as financial products requiring regulatory oversight since 2022, making South Africa the first African country to do so. This move aims to protect the public from increasing fraud risks, including sophisticated technologies like deepfakes. Areas of heightened risk include crypto-related services, anti-money laundering non-compliance, and copy trading.
The FSCA is prepared to take strong action against non-compliant firms. Entities operating without registration could face fines of up to R10 million or even criminal convictions and prison sentences of up to 10 years. Despite the new regulations, the search results do not reveal any information about the first crypto company shut down by the FSCA after the new rules came into effect in 2022.
AfriInvest and MutualWealth claim to use artificial intelligence (AI) to deliver these high returns. However, they have also falsely used prominent South African figures' names for endorsements, including Steve Hofmeyr, Kallie Kriel, and Maroela Media. All have denied any association with these firms.
The FSCA urges the public to be cautious and avoid investing with unlicensed firms like AfriInvest and MutualWealth. The authority is committed to protecting investors and will continue to monitor and enforce regulations to combat fraudulent activities in the crypto space.
