In an official statement, Sygnia, a money management company from South Africa, declared its intentions to open an exchange for digital currencies within the third quarter of 2018. The exchange will focus on boosting the interest of local investors in virtual coins.
The Cape Town based company said that it would “offer investors a secure trading and execution platform backed by an international infrastructure, well-designed custody, and integration with standard savings products.” The six-month trading statement released on Friday informed that the company would use some amount from the 181 billion rands ($14.5 billion) fund under its management to invest in a number of digital currencies.
Bitcoin and Ethereum have been enjoying growing popularity in the country recently which made South African central bank create a special unit for financial technology. The unit is studying the interest of the bank in Digital currencies and trying to develop new policies for the local crypto space. This Thursday, Francois Groepe, Deputy Governor South African Reserve Bank, said that the bank does not acknowledge virtual currencies as money and hence they should not be called cyber tokens.
On the other hand, the company was disappointed when the local bourse rejected its proposal to list a crypto backed exchange-traded fund on the JSE. Sygnia Cryptocurrency Fund has been launched by the asset management company which invest in various virtual coins for its customers but still does not trade at the JSE as an ETF. The company has also started various Sharia investment funds under the aegis of “Sygnia Activist Fund” that will capitalize on its activism. It should be noted that the company’s asset undertaking increased 14 percent to R180.6 billion by the end of March while the interim revenue jumped by 41 percent to R207 million.
Magda Wierzycka, CEO, said, “The growth in revenue was primarily a result of a growth in existing assets under management through organic client growth and new client flow, a strong performance from Sygnia Securities in generating execution income, and the enhanced revenue stream from Sygnia Itrix.”
In regard to the crypto exchange planned by them, she said that the company is primarily focused on providing integrity and security to its clients. It is developing policies, rules, and regulations based on the framework of crypto exchanges in New York.
Due to the increasing popularity of digital currencies in South Africa, crypto frauds have also multiplied. According to local reports, the police department is probing an alleged crypto investment fraud that duped more than 28,000 people for over R1 billion ($80.4 million). The company alleged in the argument is BTC Global or BitCaw Trading Company which promised 2 percent interest returns every day to the common public.
It is the sole reason the government is skeptical of digital currencies as they can be used for frauds and illegal activities. The company would have to develop high-end security policies to avoid any unwanted conditions crypto exchanges have faced recently. As of now, we would have to wait to see the true personality of the upcoming crypto exchange.
