Uganda's finance watchdog calls for crypto regulations in the country

Uganda’s Financial Intelligence Authority wants the government to come up with clear-cut crypto regulations.

According to a report by Ugandan media outlet Daily Monitor on Monday, the FIA has asked the country’s finance ministry to develop a legal framework for cryptocurrency regulations in Uganda.

Sydney Asubo, executive director of the FIA, made the call during a meeting with stakeholders over the weekend. According to Asubo, the need for crypto regulations in Uganda has become of paramount importance given the noncompliance of industry participants to the agency’s licensing requirements.

Indeed, the FIA amended the country’s Anti-Money Laundering laws to include crypto exchanges and other virtual asset providers, or VASPs. However, the FIA director revealed that several VASPs continue to operate illegally, with only a few platforms electing to register with the AML watchdog.

For Asubo, the FIA’s inability to maintain strict oversight on crypto exchanges and VASPs, in general, was a blow to the agency’s desire to regulate the country’s cryptocurrency sector. “Virtual assets service providers are now in category 16 of the most vulnerable to terrorism financing and money laundering,” Asubo added.

Apart from money laundering risks, Asubo identified investment scams as another risk of the current lack of crypto regulations in Uganda. As previously reported by Cointelegraph, fraudsters have leveraged the current popularity of cryptocurrency to siphon money from unsuspecting victims via elaborate digital currency investment scams in Uganda.

As previously reported by Cointelegraph, more than 5,000 victims of Dunamiscoins — an alleged crypto scam — petitioned the government for a return of losses incurred by investing in the purported Ponzi scheme.

Indeed, the principal actors of the alleged $2.7 million Dunamiscoin scam also stood trial amid crackdowns by the government against cryptocurrency Ponzi schemes back in early 2020.

The FIA’s call for cryptocurrency regulations also comes as global music star Akon is set to build a crypto city in Uganda. Akon received approval from the government in April for a one-mile futuristic city powered by his Akoin cryptocurrency.