The Financial Intelligence Authority of Uganda (FIA Uganda) has requested the Ministry of Finance to come up with a framework to help regulate cryptocurrency operations in the country.
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This request has arisen due to non-compliance by various crypto exchange operators in the country to register their businesses. A memo for amendment was given in regards to crypto regulations in late 2020.
The amendment Act means that cryptocurrency exchanges and virtual assets providers are now subject to the supervision and monitoring by the FIA.
According to the chairman of FIA, Virtual asset providers of the country have refused to conceal the order, allowing them to operate illegally.
The amendment meant that anyone or any company that conducts one or more of the following activities for or on behalf of another person or entity is required to register with the FIA.
- The exchange between a virtual asset and fiat currencies
- The transfer of virtual assets
- The safekeeping or administration of virtual assets or instruments enabling control over virtual assets
- The participation in or provision of financial services related to an insurer’s offer or sale of a virtual asset
Speaking to a group of organizations in Kampala, Uganda, Mr. Sydney Asubo, Executive Director, FIA Uganda, said:
“Virtual assets service providers are now in category 16 of the most vulnerable to terrorism financing and money laundering.
Last year we gave them one month to register but only a few responded,” he said, noting many cryptocurrency operators continue to operate illegally, which makes it difficult to regulate their activities.”
– Executive Director, Financial Intelligence Authority, Uganda
The Financial Intelligence Authority (FIA) is a Ugandan government agency mandated to detect and deter money laundering and terrorist financing by providing information relating to financial transactions to law enforcement and competent authorities to support the investigation and prosecution of money laundering, terrorist financing, and other related crimes.
The AML Act 2013 also designates certain businesses and professions as Accountable Persons. In this case, VASPs are now classified as such.
Several high-profile crypto scams have exposed many Ugandans to millions in losses, Hence the need for the registration of crypto entities within the country.
In December 2020, FIA Uganda amended the 2013 Anti-Money Laundering Act through an act of Parliament to include Virtual Asset Service Providers (VASPs) as Accountable Persons.