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Uganda’s Financial Intelligence Authority (FIA) says it wants the country’s Finance Ministry to help formulate a regulatory framework for crypto service providers. According to the FIA, this call for the government’s intervention has prompted by the Ugandan crypto industry’s failure to comply with an earlier plea for industry players to register.

Terrorism Concerns

Furthermore, in a recent report—which quotes Sydney Asubo the FIA executive director—the financial intelligence body explains why it wants the Ugandan government’s involvement in crafting the regulation. The report states:

Virtual assets service providers are now in category 16 of the most vulnerable to terrorism financing and money laundering. Last year we gave them one month to register but only a few responded.

In December 2020, the FIA published a letter revealing an amendment to the Anti-Money Laundering Act which classed Virtual Asset Service Providers (VASP) “as accountable persons.” This, therefore, meant entities like cryptocurrency exchanges or other crypto asset service providers were “now subject to the supervision and monitoring by the FIA.”

Protecting Ugandans From Crypto Scams

Still, despite this amendment calling VASP to register by December 27, 2020, only a few have responded. According to the FIA, this non-compliance limits its ability “to protect users and the larger economy.”

Meanwhile, the report also explains how the proliferation of “pyramid and cryptocurrency companies that offer out-of-the-world returns on investment” has shaped how FIA views the crypto industry.

Many Ugandan citizens have, just like many others across Africa, been victims of crypto scams. The FIA believes it can fight as well as reduce the number of crypto scammers if crypto service providers are placed under its supervision.

Do you agree that regulation will end or reduce the number of crypto scams in Uganda? Tell us what you think in the comments section below.

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