Abstract
In 2008, E-commerce changed forever when Bitcoin, the first crypto asset, was invented. Since then, crypto assets have become a popular investment model and private currency. Despite this, crypto assets are not recognised as legal tender by the SARB or regulated in South Africa. Regulation is essential, however, as crypto assets bring many disadvantages as well as advantages.
While attempts have been made to regulate them (in the form of the 2021 IFWG Position Paper on Crypto Assets), no consolidated framework exists on crypto assets. Therefore, this research dissertation highlights the need for regulatory intervention by addressing numerous challenges brought forward by crypto assets. These challenges, which include the lack of consumer protection, negative environmental implications, rampant cybercrimes, and regulatory arbitrage, bring forth many risks that threaten to harm the crypto asset environment. Therefore, this dissertation investigates how these challenges need to be addressed by policymakers to ensure the proper and legitimate functioning of crypto assets.
In addition to highlighting the challenges facing crypto asset regulation, this dissertation also undertakes a comparative analysis by focusing on the regulatory developments made by Japan, Canada, and the EU. Finally, recommendations are made to address the problems posed by the research.