South Africa’s Financial Regulator Dismisses Karatbars (KBC) Crypto Assets As A Financial Product
Karatbars International controversial KBC coin will no longer be getting attention from South Africa’s financial markets regulator, the Financial Sector Conduct Authority (FSCA). The regulator had earlier on issued a warning terming the KBC coin a ‘fraud’; German’s BaFin also made similar moves in response to Karatbars operations within its jurisdiction.
FSCA Vs Karatbars International
The FSCA warning to Karatbars back in November triggered a response in which the digital asset-oriented firm acknowledged involvement in marketing activities for its Karat Gold coin. However, the firm noted that the underlying crypto asset would launch in the SA market at a much later date. Karatbars also said that they are actively involved in the sale of gold bullions.
Looking back, it is notable that FSCA warning was mainly driven by the ‘crypto asset’ product mention. This SA regulator moved in after Karatbars started its marketing campaign and information circulated on the sale of KBC coins via WhatsApp. The recent developments however show that FSCA might have changed its strict stance towards Karatbars and instead opted to ignore.
According to a Dec 13 update by the FSCA, none of the Karatbars products fall within the SA financial market jurisdiction. This is simply because they do not meet the definition of financial products as one would say for securities. Despite being a significant statement, turning a blind eye on potential securities fraud by Karatbars can further give the firm leverage to market and sell its products in South Africa.
The Controversial July KBC Coin Hype
The KBC coin market hype back in July triggered a bull run for the digital currency which saw it rise to around 12 cents. However, this was very short lived as the price slid back to 3 cents in a month’s time. Some Analysts within the crypto industry said that the marketing efforts were part of a pump and dump strategy in which top promoters and management cashed out.