BEFORE YOU GO...
Check how Shufti Pro can verify your customers within secondsRequest Demo
Namibia raises the bar with new legislation in the National Crypto Strategy to combat crypto scams and money laundering. These groundbreaking obligations are vital for national security and set a foundation for more rigid regulations.
In July, the South African national assembly approved a Virtual Asset Act. According to this law, all regulatory authorities must supervise the crypto sector and ensure crypto services providers comply with regulations. However, Namibia is still in its infancy stages, incomparison to other countries, when it comes to the development of a secure business environment and drafting comprehensive laws to accompany this.
According to Ronald Nanub, the economist at the office of the Prime Minister in Namibia, the act is an innovation and a new beginning, but it is a timely “skeleton” in front of what the crypto space needs right now. To comply with the regulation, Namibia needs a crypto tax framework “fit for purpose.” Whilst the law requires the regulatory authorities to supervise the crypto industry, it does not specify the list of the watchdogs. Diana Vivo, associated with the law firm in Namibia, said the regime change demands virtual asset suppliers “to the same standards that you would have on exchange controls and financial institutions.” One of the problems with these laws is that international companies do not know how to choose regulators, which might make it difficult for businesses to operate in Namibia.
In 2017 the Namibian bank rejected the Virtual Asset Act by asserting that crypto exchanges are illegal and banned in the country. The new law has changed this act by forcing crypto firms to comply with Companies Act and Financial Intelligence Acts. If firms want to operate in Namibia, they must register one of their office in the country to get a licence. The crypto firms which are operating without a licence could face 10 years of imprisonment or pay $671,572 to the Namibian government.
The new law also set requirements to protect customers identity, combat money laundering, and prevent financial manipulation. However, in the first step, regulatory authorities have to set up comprehensive programmes for crypto sectors. Under the Virtual Asset Act, the chosen crypto regulators’ authorities can issue licences and upgrade rules according to country policies. Vivo stated that the Act “doesn’t give obligations to the regulatory authority, the structure, the level of expertise that it needs to have, it’s still very open,” these are one of the loopholes which can be changed in future legislation. She also mentioned, “The new law will come into effect on a date determined by Namibia’s finance minister.”