South African Professor Accuses Central Bank Official of Spreading Misinformation Hurting Crypto Industry – Bitcoin News

A South African professor, Steven Boykey Sidley, has branded as “balderdash” claims by the South African central bank governor that “90% of cryptocurrency transactions” are illegal. The professor also accused the central bank official of spreading inaccurate information that “does immeasurable damage to an important new industry.”

Only 0.15% of crypto transactions are linked to illegal activity

A South African university professor and author, Steven Boykey Sidley, has criticized Kuben Naidoo, the country’s deputy governor, for claiming that “90% of cryptocurrency transactions” are illegal. Sidley described Naidoo’s claims as “balderdash”, insisting that “real statistics are continuously collected and reported by a number of data analytics companies” and prove that only a small fraction of crypto transactions are linked to illegal activities.

In an opinion piece published by the Daily Maverick, Sidley accuses the South African Reserve Bank’s (SARB) deputy governor of spreading “misinformation that is making headlines and doing immeasurable damage to an important new industry”. To support this theory, Sidley points to the data provided by Chainalysis which suggests that only 0.15% of crypto transactions are linked to illegal activity.

For Sidley, who is also the co-author of the book titled “Beyond Bitcoin: Decentralized Finance and the End of Banks,” this number is much lower compared to illegal transactions involving fiat currency.

“Additionally, the number of transactions related to illegal transactions in the real world of rands and dollars, where we live, is 5%. That’s 50 times higher than crypto (and those are the only ones we know of),” Sidley is quoted as explaining.

According to the professor, because blockchain transactions are public, it is impossible to commit a crime that goes unnoticed. Sidley added that this level of transparency makes “tracking the proceeds of crypto-crime” much easier.

Attempting to regulate a new asset class with old laws will not work

Meanwhile, Sidley also offered his thoughts on the SARB’s intention to regulate cryptocurrency as a financial asset. As previously reported by Bitcoin.com News, the SARB expects to have a regulatory framework for crypto in place by the end of 2023. According to Sidley, such a regulatory framework removes the uncertainty that currently plagues the entire industry and allows institutions such as banks to tap into “this asset and the service area”.

While such a regulation is expected to create a certain level of security, Sidley argued that it will reveal an even bigger problem awaiting the industry – the regulation of cryptocurrency with laws passed more than a century ago. He said:

What the Sarb (and all other regulators) are trying to do is shoehorn crypto into existing regulations designed decades ago for assets that are hundreds of years old – stocks, currencies, commodities, collectibles and the like. It’s not going to work.

Sidley insisted that these entirely new asset classes must be “properly defined before the whole field can be rationally regulated.”

Register your email here to get a weekly African news update delivered to your inbox:

What are your thoughts on this story? Let us know what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwean award-winning journalist, writer and author. He has written extensively about the economic problems in some African countries, as well as how digital currencies can provide Africans with an escape route.