Svmuu News: Cryptocurrency exchange Luno has formally challenged South Africa’s proposed foreign exchange law reforms, arguing that the Ministry of Finance’s plan to include digital assets under capital controls bypasses Parliament and affects the property and privacy rights of millions of South Africans.
In its submission, Luno pointed out that the draft legislation includes provisions for asset seizure without a court order, forced liquidation, and sanctions that could lead to business closure. Violators could face up to five years in prison, a fine of $53,000, or both.
Luno recommends that the final framework for cryptocurrency capital flows be established through a parliamentary bill, which would classify cryptocurrency assets purchased and held on licensed South African exchanges as domestic assets and distinguish between different categories of digital assets based on their economic functions.
Luno also recommends removing mechanisms for forced sales and warrantless asset seizures, and allowing non-resident international trading firms to continue accessing the South African market upon proper registration, in order to maintain market liquidity.