A South African professor, Steven Boykey Sidley, has called “nonsense” claims by the deputy governor of South Africa’s central bank that “90% of cryptocurrency transactions” are illicit. The professor also accused the senior central bank official of disseminating inaccurate information that is “causing immeasurable damage to an important new industry”.
Only 0.15% of crypto transactions are related to illicit activity
A South African university professor and author, Steven Boykey Sidley, has criticized Kuben Naidoo, the country’s central bank deputy governor, for claiming that “90% of cryptocurrency transactions” are illicit. Describing Naidoo’s claims as “nonsense”, Sidley insisted that “true statistics are continuously gathered and reported by many data analytics companies” and prove that only a tiny fraction of crypto transactions are related to illicit activities.
In an opinion piece published by the Daily Maverick, Sidley accuses the Deputy Governor of the South African Reserve Bank (SARB) of spreading “misinformation that is grabbing headlines and causing immeasurable damage to an important new industry”. To support this theory, Sidley points to data provided by Chainalysis which suggests that only 0.15% of crypto transactions are linked to illicit activity.
For Sidley, who is also a co-author of the book Beyond Bitcoin: Decentralized Finance and the End of Banks, that figure is far lower than illicit transactions involving fiat currency.
“Furthermore, the number of transactions related to illicit 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),” says Sidley.
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 cryptocurrency proceeds” much easier.
Trying to regulate a new asset class with old laws won’t work
Meanwhile, Sidley also shared his thoughts on the SARB’s intention to regulate cryptocurrency as a financial asset. Like before reported per Bitcoin.com News, the SARB expects to have a crypto regulatory framework in place by the end of 2023. According to Sidley, such a regulatory framework removes the uncertainty currently plaguing the entire industry and allows institutions like banks to enter “this space of assets and services.
While such a regulatory framework should create some level of certainty, Sidley argued that it would expose an even bigger problem that awaits the industry – the regulation of cryptocurrency with laws passed more than a century ago. ‘a century. He said:
What the Sarb (and all other regulators) are trying to do is fit crypto into existing regulations designed decades ago for assets that are hundreds of years old – stocks, currencies, commodities , collectibles, etc. It won’t work.
Sidley insisted that these entirely new asset classes need to be “properly defined before the whole field can be rationally regulated.”
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