Crypto Exchange Regulations Have Come to Namibia

Updated: 26 July 2023

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Namibia takes a significant step towards regulating crypto trading by introducing the VASP regulating law into the Gazelle of the Republic of Namibia.

The Namibia Virtual Assets Act 2023 aims to regulate crypto-related activities by creating an authority to oversee cryptocurrency exchanges in the country.

Namibia’s President Hage Geingob signed the crypto regulation bill on July 14, after its introduction on July 6th. The bill’s entry into the gazette signifies the regulation of the crypto market in Namibia, while the Finance Ministry will decide the effective date.

Tackling Money Laundering and Protecting Consumers is the Top Concern

Gazette Number 8143 incorporates the entire Virtual Assets Act 2023 into Namibian Law, aiming to safeguard customers, mitigate money laundering and financial terrorism risks, and regulate cryptocurrencies in the country.

As per the law, regulatory authority will issue licenses to cryptocurrency exchanges, with the power to withhold them if the exchange fails to follow the specified code of conduct. This code includes safeguarding customers’ assets, ensuring confidentiality, and adhering to corporate governance rules outlined in the act.

The act treats cryptocurrency exchanges as standard companies, subjecting them to regulations similar to privately owned limited liability entities. Rules regarding leadership roles and geographic location align with traditional corporate regulations.

Exchanges are required to comply with standard regulations, including having a registered office within the country. The act also mandates exchanges to notify the authority in case of cyber-security breaches, criminal proceedings, service halts, and significant changes in business activities.

Failure to adhere to these regulations or other provisions of the act could lead to penalties for the exchange’s leader, including fines of up to N$ 10,000,000 and imprisonment of up to 10 years.

From Banning Crypto to Regulating It

Namibia’s regulatory stance on cryptocurrency has significantly changed in the past five years. In May 2018, the Bank of Namibia revisited its cryptocurrency ban and published a document reflecting the revision.

“The overall position of the bank is that it does not recognize, support or recommend the possessing, utilization, and trading of cryptocurrencies in Namibia and by the members of the public.”

The Bank of Namibia remains neutral on crypto trading, emphasizing that individuals who participate in it do so voluntarily. While not imposing a ban, the bank advises caution and discourages using cryptocurrencies.

The Bank of Namibia might reconsider its stance on regulatory oversight due to recent developments.

Namibia has recently enacted a tax on cryptocurrencies and NFTs as part of the Virtual Assets Act in the Gazette.

Namibia Imposes Tax on Cryptos and NFTs – https://t.co/86Ayfu1OLn pic.twitter.com/7jF8PZYiC8

— Nairametrics (@Nairametrics) July 13, 2023

Namibia joins other nations like Mauritius, Kenya, Botswana, and Seychelles in implementing cryptocurrency laws as it establishes its regulatory authority in the field.

Several countries, including Ethiopia, Cameroon, Lesotho, Liberia, the Republic of Congo, Sierra Leone, Zimbabwe, and Tanzania, have opted for a blanket ban on cryptocurrencies, diverging from the regulatory approach taken by other nations.

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