A new crypto startup in South Africa was accused of rendering crypto services outside the ambit of the law. The accusations were leveled against the startup by the country’s watchdog, which is authorized to deal with crypto exchanges. However, after raising objections against the crypto trading platform, the same day the watchdog rendered an apology.
In its recent action, the Financial Sector Conduct Authority (FSCA) of South Africa had seen raising objections against a fresh crypto startup namely Ovex.
It was alleged by FSCA that the startup was going to render crypto trade services without obtaining the required license. It alleged that Ovex from FSCA did not seek the mandatory approval in the form of a license. Anyone operating without this license is considered carrying out an illegal business.
However, in less than a day, FSCA publicly apologized to Ovex that it had made a mistake. According to the statement of FSCA, it was clarified that Ovex was not legally required to obtain any license from the authority. In the statement, FSCA further informed that Ovex provided certain documentary proof to the authority after raising objections. After examining these documents, the authority concluded that Ovex did not require any license. In addition, the business to be carried out by the firm was out of the supervisory scope and ambit of FSCA.
When the media highlighted FSCA’s retraction from its earlier statement, one of its officials still tried to emphasize the authority’s action. Brandon Topham, who is amongst the top officials of FSCA, said that the authority only warned the startup. He stated that there is a difference between a “warning” and raising an “allegation” against someone. In the case of Ovex, the company was only warned and no direct allegations were in fact raised against it, stressed Topham.
Topham even went on to state that the warning was not at all against Ovex per se. In fact, it was a general warning to all the crypto trading exchanges working in the country. He said that the aim of the authority is to ensure that crypto exchanges have been apprised that there are laws that have to be followed. Yet he impliedly admitted that the authority acted in haste and jumped onto the conclusion without considering all aspects. If any warning was to be given to Ovex then it was to be ensured that the authority had done its homework first.
In the meanwhile, Ovex also responded to the allegations raised by FSCA. It said that the authority miserably failed to consider the real facts and acted irresponsibly. It said that before they could even start their business operations, the authority tarnished the company’s reputation mistakenly. Ovex further said that it is carrying out a legal business and being a responsible corporate entity will ensure compliance with laws and regulations.