- Botswana to enact virtual assets law to target crypto-currencies
- FATF deems virtual assets red flags
- NBFIRA to regulate Virtual Assets Service Providers
In its quest to comply with requirements set by the Financial Action Task Force (FATF) that place emphasis on curbing money laundering and financing terrorism, Botswana is moving with speed to tame virtual money laundering and proliferation risks that are on the rise everywhere in the world.
The Business Weekly & Review is in possession of Minister Serame’s presentation to the General Assembly that sought to define what virtual assets and virtual assets service providers are. She referred to Virtual Assets and Virtual Assets Service Providers (VASPs) “as a new sector in most jurisdictions (that poses) significant money laundering and terrorist financing risks.”
According to the minister, in October 2019 FAFT revised its standards regarding new technologies by introducing Virtual Assets and VASPs in response to the imminent risk that the new digital sector may become open to abuse by criminals and terrorists for use as a conduit for laundering money and a leeway for financing terrorist attacks.
Serame said in order to align with the new international standards, Botswana will introduce the virtual assets law to enable managing, mitigating and preventing money laundering, financial terrorism and purification risks posed by the emergence of virtual assets business practices.
“The objective of the bill is to provide a comprehensive legislative framework to regulate the new and developing business activities of virtual asset service providers and the issuance and trading of virtual assets,” she noted. The bill has six parts divided into 36 clauses. The first part of the law, which gives definitions of what virtual assets are, defines them as “a digital representation of value that can be digitally traded, or transferred, and can be used for payment or investment purposes”.
She gave crypto-currencies as an example of virtual assets that may be in the form of bitcoins. Under the proposed law, the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) will be designated as the Regulator of Virtual Assets Service Providers. Further, the bill will empower NBFIRA to request for information from VASPs and documentation relating to their business activities. It calls for the licensing of service providers and issuers of initial token offerings who meet set standards by NBFIRA.
Another part of the law deals with the professional conduct licensed service providers and their compliance with the law. “This includes confidentiality of customer information and data protection measures consistent with the Data Protection Act,” Minister Serame said. The bill formed part of the order paper for the emergency meeting of Parliament to be tabled.
Since the advent of the digital age, the emergence of crypto-currencies has been on the rise globally. The crypto-currency market was valued at $1.49 billion in 2020 and is anticipated to reach $4.94 billion by 2030. Despite its lucrativeness, it has proved to be a gathering place for scoundrels who do not miss an opportunity to defraud and swindle many out of their hard earned money and to perpetrate virtual money laundering and financial terrorism.
