The FIA has asked the country’s finance ministry to develop a legal framework for cryptocurrency regulations in Uganda, according to report by Uganadan media outlet Daily Monitor on Monday.
The need for crypto regulations in Uganda has become of paramount importance given the noncompliance of industry participants to the agency’s licensing requirements, according to Sydney Asubo, executive director of the FIA, made the call during a meeting with stakeholders over the weekend.
Indeed, the FIA amended the country’s Anti-Money Laundering laws to include crypto exchanges and other virtual asset providers, or VASPs. However, the FIA director revealed that several VASPs continue to operate illegally, with only a few platforms electing to register with the AML watchdog.
For Asubo, the FIA’s inability to maintain strict oversight on crypto exchanges and VASPs, in general, was a blow to the agency’s desire to regulate the country’s cryptocurrency sector. “Virtual assets service providers are now in category 16 of the most vulnerable to terrorism financing and money laundering,” Asubo added.
Apart from money laundering risks, Asubo identified investment scams as another risk of the current lack of crypto regulations in Uganda. As previously reported by Cointelegraph, fraudsters have leveraged the current popularity of cryptocurrency to siphon money from unsuspecting victims via elaborate digital currency investment scams in Uganda.