The Governor of Bank of South Sudan (BoSS) Johnny Ohisa Damian has cautioned the public members who are doing virtual currencies traded by unregulated entities about some risks associated with the venture.
“The bank of South Sudan wishes to advise members of the public who are investing in, or otherwise conducting transactions in virtual currencies, of the potential risks associated with buying, holding, or trading in virtual currencies,” the governor warned in a statement.
The governor said that Virtual currencies such as Bitcoin is a digital representation of the value that can be digitally traded and functions as medium of exchange within a specified online community but does not have legal tender status in South Sudan.
“Providers of virtual currencies in South Sudan are neither regulated nor supervised by the Bank of South Sudan and there is currently no legislative Provision under the Banks’ statute that provides protection to customers for losses arising from the use of virtual currencies,” he added.
In addition, unregulated virtual currencies companies may lack appropriate internal controls and may be more susceptible to fraud and theft than the regulated financial institutions, the governor continued.
Transactions involving virtual currencies are subjected to a high degree of anonymity and as such, there is potential for misuse of virtual currency in conducting criminal activity like money laundering or terrorism financing according to the governor.
He announced that virtual currencies tend to be volatile and their value can fluctuate significantly anytime noting that the high volatility of virtual currencies make them unsuitable for most investors, especially those investing for long -term goals.
“The Bank of South Sudan noted with concern the social media reports on the emergency of schemes purported to be virtual currencies that promise high return when members purchase and recruit others to join/invest. We strongly advise members of the public to be cautious of such schemes and conduct appropriate due diligence as these may be Ponzi schemes in disguise,” itemized bank of South Sudan.
The governor pledged to continue monitoring activities involving the use of virtual currencies and advise the public accordingly.
