South Africans and their assets under siege

South Africa’s financial markets regulator is ramping up its operations to combat an explosion in online scams.

The Financial Sector Conduct Authority will spend R200 million over the next 18 months to build up the supervisory muscle to beef up monitoring and enforcement.

The investment is the “largest IT reorganisation” the FSCA has had to date, Commissioner Unathi Kamlana said in an interview on Wednesday. 

The watchdog is also recruiting experts “with a specific focus on crypto supervision” and the ability to probe “crypto-related scams,” he said.

South Africa is battling rising attacks, with verification platform Sumsub recording a 1,200% increase in the number of deep fakes in Africa’s most industrialised nation between 2022 and 2023. 

That vastly outpaced the 450% increase elsewhere in the Middle East and Africa.

Kamlana said he expects to lift agency staffing to the mid-700s over the next three years from 680 currently.

The country has been the backdrop to several of the world’s largest crypto scams that resulted in the disappearance of billions of dollars in investments.

This includes 70,000 Bitcoin vanishing in 2021 from a platform called Africrypt, run by two brothers who quickly fled the country, and a fraudulent marketing scheme that led to a $3.4 billion fine in a US court in 2023.

The FSCA undertook 1,350 enforcements in the 12 months through March and imposed fines of 120 million rand. 

That’s a steep decline from the previous year’s record 943 million rand in fines, which it said was a mark of success.

The agency’s actions “have served as an effective mechanism of deterrence,” Kamlana said. “We’ve focused on those that give the maximum kind of impact.”