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Namibia Cracks Down on Cryptocurrency Fraud with New Legislation
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Namibia has introduced a new legislation as part of its National Crypto Strategy to combat cryptocurrency scams and money laundering. This groundbreaking law is expected to set the tone for more stringent regulations in the country.
A Step in the Right Direction, But More Work Needed
Despite South Africa’s recent approval of a Virtual Asset Act, Namibia is still in its infancy stages when it comes to developing a secure business environment and comprehensive laws to accompany it. According to Ronald Nanub, an economist at the office of the Prime Minister in Namibia, “It’s a skeleton of what we need right now.”
Key Provisions of the New Law
- Requires regulatory authorities to supervise the crypto industry
- Fails to specify which watchdogs will be responsible for this task
- Reverses the previous decision by the Namibian bank in 2017, declaring crypto exchanges illegal and banned in the country
- Forces crypto firms to comply with Companies Act and Financial Intelligence Acts
Operating Requirements for Crypto Firms
To operate in Namibia, crypto firms must:
- Register an office in the country
- Obtain a license
- Face severe penalties, including up to 10 years’ imprisonment or a fine of $671,572, if operating without a license
Additional Requirements for Protecting Customer Identities and Combating Money Laundering
The new law also sets requirements for:
- Protecting customer identities
- Combating money laundering
- Preventing financial manipulation
However, regulatory authorities have yet to establish comprehensive programs for the crypto sector.
Future Development Needed
Diana Vivo, an associate at a Namibian law firm, warned that international companies may struggle to choose regulators, making it difficult for businesses to operate in the country. She also noted that the legislation lacks clear obligations for regulatory authorities, leaving loopholes that can be addressed in future legislation.
Implementation Timeline
The new law is set to come into effect on a date determined by Namibia’s finance minister.