I want to make this the “goto thread” for anyone who wants to get involved with Bitcoin and Cryptocurrencies. There is a lot of information out there and a lot of it can be very intimidating for new-comers. This guide will try to gather the most relevant and informative links together for a quick crash-course into becoming clued up on cryptocurrencies. But before I get started, let’s start with a disclaimer.
DISCLAIMER: This is NOT financial advice, legal advice or any other advice. Any information you use in this thread or any information anywhere on this website is used at your own risk. Neither myself, any other Koinexpert staff member or user will take any responsibility for anything you do with the information available on this site.
What’s with the disclaimer?
Disclaimers are important when you talk about money and the reason for that is due to a concept called Financial Advice:
The Financial Advisory and Intermediary Services Act (FAIS) aims to protect customers from investment advice that is not sound and/or sub-standard financial planning products and services that are marketed in a manner that is not in the best interests of the client. This Act outlines what constitutes advice and the qualifications required of advisers in order to render advice for specific investments.
You can read more details on FAIS here: https://www.oldmutual.co.za/personal/financial-planning/know-your-rights
In short, it means that no one can give financial advice if they are not registered to do so. And chances are that if you haven’t heard of FAIS that you are probably not registered to give financial advice. You can stay out of trouble by trying to stick to these tips:
- Don’t give people financial advice
- If you think people might take what you are saying as financial advice, always specifically state that it is not financial advice.
And again, none of this is financial advice.
What is Bitcoin?
Who invented Bitcoin?
What is an Altcoin?
What does South African law say about Cryptocurrencies?
At the time of writing (January 2020), there still isn't too much that is official. What we do know is:
a) SARB is planning to implement new rules for cryptocurrencies.
The South African Reserve Bank (Sarb) is planning to introduce new rules regarding the use of digital currencies, or cryptocurrencies, in a bid to stop them from being used to evade currency controls.
While no date has been set, it is likely to be in the first quarter of 2020.
b) The most up to date crypto information page for South African is this page: https://www.resbank.co.za/RegulationAndSupervision/FinancialSurveillanceAndExchangeControl/FAQs/Pages/VirtualCurrenciesCryptocurrencies.aspx
The page has been updated several times over the last few years and is the only official public documentation that talks about crypto. It currently states:
Are there any compliance requirements or exchange controls applicable to crypto assets?
The South African Reserve Bank (SARB) does not oversee, supervise or regulate crypto assets (CAs) (previously referred to as Virtual Currencies (VCs)) currently, but is continuing its effort to monitor this area as it evolves. SARB’s position on CAs as set out in the ‘Position Paper on Virtual Currencies, 2014’ remains current and relevant. A copy of the position paper is available on the SARB's website, www.resbank.co.za, by following the links: Regulation and Supervision > National Payment System (NPS) > NPS Legislation > Position papers > Position Paper 02 of 2014, Position Paper on Virtual Currencies.
To reiterate the SARB’s position, CAs are not legal tender in the Republic of South Africa (RSA) and any merchant or beneficiary may refuse CAs as a means of payment. CAs are not guaranteed/backed by SARB as it operates independently from the central bank and the users thereof are alerted to the potential risk of fluctuation in its value. There are currently no dedicated laws or regulations that specifically govern the use of CAs in RSA and therefore, no regulatory compliance requirements exist for local trading of CAs in RSA. Legal protection or recourse to users, traders or intermediaries of CAs is therefore dependant on general common law principles. Dealing in CAs is performed at the end-users sole and independent risk. Related to CAs are the use of Initial Coin Offerings (ICOs), and similar to CAs, the SARB does not regulate or supervise the usage thereof.
Neither the Currency and Exchanges Manual for Authorised Dealers nor the Currency and Exchanges Manual for Authorised Dealers in foreign exchange with limited authority (manuals) allow for cross-border/foreign exchange transfers for the explicit purpose of purchasing CAs. These documents can be obtained from the SARB’s website, www.resbank.co.za, by following the links: Regulation and Supervision > Financial surveillance and exchange controls > Currency and Exchanges documents. The Financial Surveillance Department is, furthermore, from an exchange control point of view, unable to approve any transactions of this nature.
Individuals may purchase CAs from abroad through utilisation of his/her single discretionary allowance (SDA) (R1 million) and/or individual foreign capital allowance (FCA) (R10 million with a Tax Clearance Certificate), per calendar year, as outlined in the above-mentioned manuals, which a local Authorised Dealer in foreign exchange (AD) (local commercial bank) will be able to assist individuals with.
It should be noted that, when purchasing foreign exchange through an AD, a customer is required to sign a declaration, either physically or electronically, which includes the wording "I have been informed of the limit applicable to the above transaction and confirm that this limit will not be exceeded as a result of the conclusion of this transaction". It follows that an individual is responsible for ensuring that he/she does not exceed the relative allowance applicable to the transaction i.e. R1 million or R10 million.
Furthermore, the use of another individual's SDA or FCA, whether through the granting of a 'loan' to such an individual or any other similar agreement, is regarded as a simulated transaction for the purpose of circumventing the provisions of the Exchange Control Regulations and therefore an illegal activity. In this regard, we refer you to Exchange Control Regulation 10(1)(c), read with Exchange Control Regulation 22.
Exchange Control Regulation 10(1)(c) prohibits the entering into a transaction whereby capital or the right to capital is, without the permission granted by the Treasury, directly or indirectly exported from the RSA. Therefore, if an individual purchases CAs in RSA which is used to externalise 'any right to capital', such an individual will be in contravention of the Exchange Control Regulations. A contravention of Exchange Control Regulation 10(1)(c) is, in terms of Exchange Control Regulation 22, a criminal offence.
It should also be pointed out that the repatriation to the RSA of value through CAs is not acknowledged as a repatriation of an individual’s SDA and/or individual FCA, due to the nature of CAs and the fact that such transaction is currently not reportable on the FinSurv Reporting system.
Similarly, non-residents who have introduced CAs to RSA for sale locally and who want to transfer the sale proceeds abroad will be unable to do so. The applicable exchange control policy is outlined in section G.(C)(i) of the Currency and Exchanges Manual for Authorised Dealers.
How do people make money using Bitcoin/Altcoins?
What is trading?
What is an exchange?
Which exchange should I use?
Why does it say "coming soon" at the previous question?
This is going to be a long post and will be changed frequently. So, instead of waiting till the very end, I have decided to post it as soon as it has some useful information in it and then tweak it over time. That way I can also adjust it based on any feedback I get!
(Feel free to comment if you think I might be missing anything? )
What is a Satoshi?
How much Bitcoin should I buy?
I want to learn how to trade
We recommend HODLNOTS.
What is trading view?
What is the difference between forex and cryptocurrencies?
How can I stay safe?
What is cryptocurrency mining?
Is Cryptocurrency mining profitable?
What scams should I watch out for?
What is arbitrage?
How can I find out more information about a coin?
How does crypto differ from traditional stocks?
What are penny stocks?