The Financial Sector Conduct Authority (FSCA) has warned the investing public to be cautious when trading on the cryptocurrency platforms FTX and Bybit. The FSCA alleges that neither entity has been licensed to trade in Contracts for Difference (CFD) or to provide financial advisory and intermediary services in South Africa.
FTX Not Authorized to Give Financial Advice
South Africa’s financial services regulator, the FSCA, recently stated that the public must be cautious when dealing with the cryptocurrency exchange platform FTX. According to the regulator, FTX is not authorized to give any financial advice or render any intermediary services in terms of the country’s laws.
In its February 1 media release, the regulator emphasized that before any party starts to offer CFD or intermediary services, it needs to be licensed by the FSCA. The media statement explained:
Without commenting on the business of FTX or its products and services, the FSCA points out that, for a company to offer CFD (Contracts for Difference) trading in South Africa, it must be licensed to do so by the FSCA. The FSCA wishes to inform the public that FTX is not authorised to trade in CFDs or to provide financial advisory and intermediary services in South Africa.
The regulator added that efforts to contact FTX, which is headquartered in the Bahamas, have been unsuccessful. The FSCA, in the meantime, says “members of the public should always check that an entity or individual is registered with the FSCA to provide financial advisory & intermediary services.”
The regulator also warned the public to be on the lookout for persons or companies that are registered “to provide basic advisory services for a low-risk product” but still proceed “to offer services of a far more complex and risky nature.”
Warning About Bybit
Meanwhile, another media statement that warns the public about dealing with Bybit was similarly issued by the regulator on February 1, 2022. Again, in this statement, the regulator reiterates that Bybit is not licensed to provide financial services to South Africans.
However, according to the FSCA’s statement, Bybit, unlike FTX, has already indicated its “willingness to apply for authorisation to provide financial advisory and intermediary services in South Africa.” In this statement, the FSCA concludes by urging members of the public “to remain cautious when dealing with Bybit until they have applied for and received authorisation from the FSCA.”
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Terence Zimwara
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