Thursday, January 23, 2020

Ghana’s SEC Contemplates a Regulatory Framework for Cryptocurrency

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Adedamola Bada
I'm Damola, a computer engineer from Obafemi Awolowo University. A crypto enthusiast, marketer, and writer who is seeking to achieve career excellence through hard work and positive contribution to the organization that aspires for excellence. Contact me on damolabada@gmail.com

A cryptocurrency regulatory framework is in the works for Ghana which would make the operation of local crypto startups and exchanges legal, thereby preventing any crackdown on such businesses.

Ghana Regulation of Digital Assets

Based on reports from local news source, Ghana’s SEC is making moves towards the regulation of digital assets. The country’s financial regulator is also contemplating providing licenses to cryptocurrency exchanges and trading platforms.

The number of crypto-related fraudulent investment schemes has been on the increase in Ghana in recent times. Just last year, more than one hundred thousand Ghanaian investors reportedly fell victim to Global Coin Community Help (GCCH), a fraudulent cryptocurrency investment scheme, in which the scammers made away with 135 million Ghanaian Cedi belonging to investors.

While talking about the development, Paul Ababio, the Deputy Director General of the SEC, noted that:

“[…] Desist from dealing with these crypto entities. […] When you choose to go there you are on your own. We have adopted a wide range of changes on it, and we are still doing our research and gathering information. We welcome any input that people might have to help us formulate a view on how we should deal with it in Ghana.”

The Future of Digital Assets in Ghana

Similar to the warnings issued by many central banks the world over against cryptocurrency, the Bank of Ghana has advised citizens of the nation not to invest in cryptocurrency due to its high volatility.

Responding to the GCCH scam, the Bank of Ghana’s secretary, Frances Van-Hein, in a statement said: “Anyone who does business with these entities does so at his or her own risk, and the Bank of Ghana will not be liable for the refund of any deposit lost by a depositor.”

However, according to reports, the way cryptocurrency is handled in Ghana could change for the better if the SEC steps in to regulate the sector. Mr. Ababio stated that Ghana’s Economic and Organized Crime Office (EOCO) is investigating the activities of three crypto firms whose operators have suddenly disappeared.

The SEC’s Likely Effect on Ghana

Richard Gardner, the CEO of Modulus, commends the efforts of Ghana’s SEC to regulate cryptocurrency in the country, pointing out that its regulation will give exchanges a legal backing to operate and help protect consumers from scams and fraudulent schemes.

Mr. Gardner also encouraged a working relationship between the private and public sectors towards the creations of these regulations.

“The best way to regulate an industry, especially one which is so technical, is to bring together those involved in the private sector, along with those from the public policy side. Together, we can usually find a way to encourage industry growth while protecting consumers,” he stated.

The impact of regulations in the country’s crypto community could be a massive gain. Anyway, the event is still unfolding, and in months to come, it will be known whether Ghana will be positioned as the cryptocurrency leader in the African continent or if another should be expected.

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