South Africa cracks down on Bitcoin after alleged ponzi scheme

South Africa’s finance-industry regulator wants more power to prosecute perpetrators of fraud and oversee dealing in cryptocurrencies after the collapse of a Bitcoin trader, alleged to be the country’s largest Ponzi scheme.

The Financial Sector Conduct Authority is making proposals to regulate trading in cryptocurrencies such as Ethereum, XRP and Litecoin, the watchdog’s head of enforcement, Brandon Topham, said by phone. The FSCA has handed details of its probe into the failure of Mirror Trading International Ltd. to a top police unit after uncovering alleged fraud.

“At the point something becomes a Ponzi scheme, we have lost our jurisdiction,” he said. “We need the police and the prosecuting authority to work fast and put people in jail.”