Uganda’s Financial Intelligence Authority (FIA), on 10 December, 2020, released a press statement via their Twitter handle, stating that it has amended the country’s 2013 Anti-Money Laundering Act through an Act of Parliament to classify Virtual Asset Service Providers (VASPs) as Accountable Persons.
As contained in the document released, “Accountable Persons” are persons or businesses that might be used as channels to launder money or promote terrorism which are listed in the second schedule to the the Anti-Money Laundering Act (AMLA), 2013.
In 2020, Uganda’s government through its parliament, strongly advised the general public to stay away from cryptocurrencies. This statement was fuelled by the concurrent ponzi schemes associated with cryptocurrency in the country. David also said that the masses should only do their business transactions with only licensed financial institutions.
This led to parliament members to raise their views and opinions concerning cryptocurrency and most of the members calling for its total ban of cryptocurrencies and related digital assets. One of the parliament members, Hon. Jovah Kamateeka clearly states that the youths should value hard work and to avoid being scammed by a computer.
Also, the State Minister of Uganda, Hon David Bahati also hinted on a possible regulation of cryptocurrency and digital assets coming soon. David said:
“The Second Schedule of the Anti-Money Laundering Act, 2013 is also being amended to include virtual assets providers on the list of accountable persons. This will bring virtual assets service providers including providers of cryptocurrencies to be brought under the purview of the Financial Intelligence Authority and will be required to adhere to reporting requirements under the Act.”
CryptoSavannah, a top company in East Africa, whose name was among the companies wrongly mentioned as running a fraudulent ponzi scheme. The CEO, Kwame Ruganda speaks on the misinformation and misunderstanding of cryptocurrencies and his related digital assets as ponzi schemes and scams. He said that the parliament members have represented this misinformation about the whole idea of Cryptocurrency. He further mentioned, CryptoSavannah is a technology business that develops blockchain solutions and not pyramid ponzi schemes. Also, CryptoSavannah is part of the Blockchain Association of Uganda.
Prior to the parliament sitting, the Blockchain Associations of East Africa consisting of Kenya, Uganda, Rwanda and Tanzania jointly released a press statement regarding the recent crypto scams and ponzi schemes affecting the East African region in December, 2019.
They clearly explained:
What is a cryptocurrency?
What is a CryptoSavannah used for?
Are they legal and how are they regulated?
What are Ponzi Schemes, and how can they be recognized?
How can the public differentiate a cryptocurrency from a ponzi scheme?
The New Amended Act by the FIA explains that Cryptocurrency Exchanges(s) and Virtual Asset Service Providers (VASPs) are now under the jurisdiction of the Financial Intelligence of Authority (FIA).
The Amendment states that any individual or institutions that conduct one or more of the following activities listed below on behalf of another person or institution, is required to be registered with the Financial Intelligence of Authority (FIA) before 27th December, 2020.
The exchange between virtual asset and fiat currencies,
The transfer of virtual assets,
The safekeeping or administration of virtual assets or instruments enabling control over virtual assets,
The participation in or provision of financial services related to an insurer’s offer or sale of a virtual asset.
Also, under amended Anti-Money Laundering (AML), 2013. Cryptocurrency Enthusiasts and Players are fully expected to keep detailed records, undergo Know Your Customer (KYC) and report suspicions and huge cash transfer or transactions. If it is an institution, they must offer Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) training programs to their employees and putting in place internal controls, procedures and policies with measures for detecting and preventing money laundering and terrorist financing.
The new amendment comes barely one year after LUNO, an African Exchange started full operations in the Country and two months after Binance announced his closure in Uganda.