South African Crypto Industry Faces Challenges as US Firms Block Users
The crypto industry in South Africa is facing difficulties as US crypto firms, such as Kraken and Circle, block users in the country. This comes as Kraken’s banking partner added South Africa to its anti-money laundering blacklist, leading the exchange to stop accepting deposits from its South African users. Circle had also halted fiat payments from users in anticipation of financial sanctions on the country.
Key Points:
– Kraken, a popular crypto exchange, has stopped accepting deposits from South African users due to its banking partner’s anti-money laundering blacklist.
– Circle, the issuer of USDC, had previously halted fiat payments from users in South Africa.
– The Financial Action Task Force (FATF) added South Africa to its “grey list” of countries under Increased Monitoring, citing shortcomings in implementing technical requirements to combat money laundering in the crypto industry.
– The regulatory and technical sanctions have negatively impacted the crypto arbitrage business in South Africa, with the premium on assets trading significantly higher than their actual price.
– The reduction in trading volume and the increased premium on arbitrage trades have affected South African traders who relied on Kraken for executing their trades.
Hot Take:
The recent actions of US crypto firms blocking users in South Africa highlight the challenges faced by the country’s crypto industry. Regulatory and technical sanctions, along with banking partners’ caution, have hindered the growth of the industry and impacted crypto arbitrage businesses. South African traders are now grappling with reduced trading volume and higher premiums, affecting their profitability. As the industry navigates these obstacles, it remains to be seen how the crypto landscape in South Africa will evolve and adapt to overcome these challenges.
By
By
By
By
By