Uganda will try to regulate cryptographic resources to prevent criminals from exploiting digital currencies to defraud citizens. This happens when thousands of Ugandans have fallen victim to a series of Ponzi schemes, including Club D9, which promised to pay bitcoin members. Finance Minister (planning) David Bahati said the government has now finalized a bill on national payments, which will be presented in Parliament for approval in December.
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Legislators demand regulation
"In October, the government approved the law on the national payment system, and we intend to bring it to parliament next month, so that it can obtain all these forms of digital financial transactions," Bahati told the Ugandan parliament on 21 November. He responded to legislators' concerns about the lack of regulation in the country of Eastern Africa. growing cryptocurrency sector, which has generated several counterfeit bitcoins.
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Bahati has not provided specific details on how the proposed law will be applied. Previously, Mathias Mpuuga, a member of parliament (MP), instructed the finance minister to instruct, asking for explanations on the existence of unregulated cryptocurrencies, such as a Telex Free, a pyramid scheme accused of allegedly robbing Ugandans on hundreds of thousands of dollars. He claims that the scheme has also defrauded some Ugandan legislators.
"There are several agencies that present themselves as cryptocurrencies like ripcoin, namecoin and bitcoin.The challenge is that while this is ongoing, there is no legal framework for the supervision of these players," said the independent newspaper The Kampala, The Independent , citing Mpuuga.
He urged the government to see unregulated virtual intermediaries as "a potential bomb" that deserves state intervention to help protect individual investors.
If there is no law, but you know that there are agencies operating in the country, who should respond if there is a problem? The government can at least tell the country (who) the cryptocurrency traders that operate (they are).
Growth of pyramid schemes
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In Uganda, the adoption of cryptocurrencies and blockchain technology continues to grow. In October, Binance – the world's largest digital resource exchange – opened its first fiat-to-crypto trading platform in the country, reportedly amassing 40,000 registrations during its first week of operations.
This despite the warnings of the Bank of Uganda against the use of unregulated digital currencies such as bitcoins. The country of 44 million people hosts blockchain conferences and is home to a number of associations, apparently with support at the Cabinet level.
But Bahati He said the government has no "officially approved" cryptocurrency. He said to the parliament:
The central bank has issued a statement that the bitcoins and all their currencies are not under their control. We are warning the public that they are aware of the fact that the government has not officially approved these currencies. The government will present a bill to this effect next month.
His statement will be of little comfort to those who have lost money in shady bitcoin schemes like Club D9. The now-collapsed Ponzi scheme was proposed as a sports trading company, promising massive weekly bitcoin profits for initial investments of between $ 250 and $ 2,000.
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For many Ugandans, joining an arm and a leg, as MP and lawyer Odonga Otto knows all too well. "I am currently aware of a court case of one of the pyramid schemes called D9 that has defrauded many Ugandans, including some MPs, but there is no legal regime where people can claim their money," Otto said.
It is not clear how much money the Ugandans lost in the scheme.
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