Financial Regulators in Uganda Demands Government to Set Crypto Regulations

  • Richard Marley
  • May 25, 2021
  • 2 minutes read
  • 279

Uganda’s financia regulators, Financial Intelligence Authority (FIA), want the government to take the necessary steps towards crypto regulations. The regulators have asked the finance ministry of the country to come up with legal and regulatory guidelines for the growing cryptocurrency industry in Uganda. 

Executive director of Uganda, Sydney Asubo, demanded this during a meeting with the industry stakeholders over the weekend. The executive director believes that the need for regulations in the crypto industry in the country has become the utmost priority as the members of the industry are being increasingly non-compliant with the licensing requirements set up by the Financial Intelligence Authority. 

The FIA revised the Anti-Money Laundering regulations in the country regarding the crypto exchanges and other virtual asset providers (VASPS). Unfortunately, the director of the FIA had to report that despite the regulations, many VASPS continued to function illegally. Only a few crypto exchanges chose to register with the regulators.

Sydney Asubo says, “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.”

Other than the risk of money laundering, the director also highlights investment fraud as the risk of the unregulated crypto industry in Uganda. Fraudsters have already taken advantage of the rising popularity of cryptocurrency to make money from the unaware victims through cunning schemes of digital currency investment scams in the country. 

More than 5,000 Dunamuscoins victims have been reported. Dumaniscoins is allegedly a crypto scam. The victims have requested the government to return their losses that occurred due to investment in this Ponzi scheme. 

The main actors of the alleged Dunamiscoin scam consisting of $2.7 million also faced trial during the investigation by the government against the digital currency Ponzi scheme. The need for cryptocurrency regulations in the country by Financial Intelligence Agency is also fuelled by the global music star Akon’s decision to build a crypto city in Uganda. The singer received government approval in April for the futuristic city powered by his cryptocurrency known as Akoin.