{"id":6522,"date":"2022-08-19T17:39:06","date_gmt":"2022-08-19T17:39:06","guid":{"rendered":"http:\/\/cryptoheretostay.com\/?p=6522"},"modified":"2022-08-19T17:39:07","modified_gmt":"2022-08-19T17:39:07","slug":"south-african-banking-regulator-de-risking-crypto-firms-potentially-creates-opacity-in-financial-conduct","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=6522","title":{"rendered":"South African Banking Regulator: &#8216;De-risking&#8217; Crypto Firms Potentially Creates &#8216;Opacity in Financial Conduct&#8217;"},"content":{"rendered":"<p> <script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<\/p>\n<p><strong>According to the latest guidance note issued by the South African banking sector regulator,<\/strong> <strong>Prudential Authority, risk assessment does not mean financial institutions should avoid or eliminate risks via the wholesale termination of client relationships with entities such as crypto asset service providers. Instead, the regulator wants financial institutions to only consider \u201cde-risking\u201d when the \u201crisk posed is too great to manage successfully.\u201d<\/strong><\/p>\n<h2>A Threat to Financial Integrity<\/h2>\n<p>South Africa\u2019s main banking industry regulator, the Prudential Authority, has said some banks\u2019 decisions to terminate relationships with crypto entities \u201cmay pose a threat to financial integrity in general.\u201d In addition, the regulator suggested that avoiding cryptocurrency entities completely could potentially weaken banks\u2019 risk management processes.<\/p>\n<p>According to a guidance note sent to financial institutions by Fundi Tshazibana, the CEO of Prudential Authority, the removal of crypto entities such as exchanges from the banking system \u201ccan potentially create opacity in the affected persons or entities\u2019 financial conduct.\u201d The same also eliminates the possibility of treating risks such as money laundering, terrorist financing, and proliferation financing, the eight-page guidance note added.<\/p>\n<p>The remarks by Tshazibana come more than six months after reports emerged that certain South African financial institutions had sent out account termination notices to clients that offered automated cryptocurrency arbitrage services. As previously reported by Bitcoin.com News in late 2021, one of the banks, Standard Bank, insisted at the time that the termination of services to crypto entities was meant to ensure the financial institution\u2019s compliance with regulations.<\/p>\n<p>However, in the guidance note, which must also be sent to the respective institutions\u2019 independent auditors, the CEO instead urges banks to perform the relevant risk assessment for each crypto asset (CA) or crypto asset service provider (CASP). Tshazibana explains:<\/p>\n<p>It is thus prudent for banks to be able to risk categorise CA\/CASP-related clients through conducting a risk assessment which will assist banks in determining the appropriate level of [money laundering, terrorist financing, proliferation financing] risk management measures necessary, as opposed to total avoidance, in line with the application of a risk-based approach.<\/p>\n<p>The CEO argued that the decision to de-risk or terminate service should only be made after the \u201crisk posed by a particular business or customer is too great to manage successfully.\u201d<\/p>\n<h2>\u2018A Great Step Forward for Crypto\u2019<\/h2>\n<p>Reacting to the Prudential Authority\u2019s latest guidance note, Farzam Ehsani, CEO of a South African crypto exchange platform called Valr, said in a tweet that the arguments put forward by the regulator indicate it now understands the benefits of monitoring crypto transactions. Ehsani also gave his thoughts on what the guidance note means for the crypto industry. He said:<\/p>\n<p>\u201cIn my view, this is a great step forward for crypto, for South Africa and for the banks themselves. It\u2019s particularly helpful for companies in the crypto space that are responsibly trying to build products to serve people. Risks and bad actors obviously remain in crypto (as they do elsewhere) and banks won\u2019t immediately start banking all crypto companies.\u201d<\/p>\n<p>The Valr boss also argued that the latest guidance note will likely steer South Africa \u201cin the right direction of allowing new technologies and innovation to flourish in the country.\u201d<\/p>\n<p><em>Register your email here to get a weekly update on African news sent to your inbox:<\/em><\/p>\n<p><em><strong>What are your thoughts on this story? Let us know what you think in the comments section below. <\/strong><\/em><\/p>\n<p>Terence Zimwara <\/p>\n<p class=\"article__body__author__info__about\">\nTerence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.<\/p>\n<p><i class=\"td-icon-font td-icon-linkedin\"\/><\/p>\n<p><i class=\"td-icon-font td-icon-twitter\"\/><\/p>\n<p><i class=\"td-icon-font td-icon-telegram\"\/><\/p>\n<p class=\"images_credits\"><em>Image Credits: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n<p><strong>Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<p>More Popular NewsIn Case You Missed It<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/news.bitcoin.com\/south-african-banking-regulator-de-risking-crypto-firms-potentially-creates-opacity-in-financial-conduct\/\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>According to the latest guidance note issued by the South African banking sector regulator, Prudential Authority, risk assessment does not mean financial institutions should avoid or eliminate risks via the wholesale termination of client relationships with entities such as crypto asset service providers. Instead, the regulator wants financial institutions to only consider \u201cde-risking\u201d when the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6523,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[1],"tags":[],"class_list":["post-6522","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-updates"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/6522","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6522"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/6522\/revisions"}],"predecessor-version":[{"id":6524,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/6522\/revisions\/6524"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/6523"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6522"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6522"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6522"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}