Uganda’s financial watchdog has called for cryptocurrency controls in the nation.

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With exchanges taking their time to be controlled by the FIA, Uganda’s AML watchdog wants the government to take action on crypto regulations.

Uganda’s Financial Intelligence Authority requires the government to develop strict cryptocurrency legislation.

According to a report by Ugandan media outlet Daily Monitor on Monday, the FIA has asked the country’s finance ministry to develop a legal framework for cryptocurrency regulations in Uganda.

The FIA’s executive officer, Sydney Asubo, made the announcement at a meeting with stakeholders over the weekend. According to Asubo, the need for crypto legislation in Uganda has become critical due to market participants’ failure to meet the agency’s licencing criteria.

The FIA did, in fact, update the country’s anti-money laundering legislation to cover crypto exchanges and other virtual asset providers, or VASPs. The FIA director, however, reported that many VASPs continue to act unlawfully, with only a few platforms opting to register with the AML watchdog.

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The FIA’s failure to retain tight regulation on crypto exchanges and VASPs in general, according to Asubo, was a setback to the agency’s desire to regulate the country’s cryptocurrency market. “Virtual asset service providers are now ranked 16th in terms of their vulnerability to terrorism financing and money laundering,” Asubo said.

Aside from money laundering threats, Asubo described investment scams as another challenge of Uganda’s existing lack of cryptocurrency regulations. As previously mentioned by Cointelegraph, fraudsters in Uganda have taken advantage of the latest cryptocurrency boom to syphon money from innocent victims through sophisticated virtual currency investment schemes.

As previously noted, over 5,000 Dunamiscoins — a suspected crypto scam — investors petitioned the government for compensation for damages suffered by investing in the supposed Ponzi scheme.

Indeed, the suspected $2.7 million Dunamiscoin scammers were tried in February 2020 as part of the government’s crackdown on cryptocurrency Ponzi schemes.

The FIA’s appeal for cryptocurrency laws arrives at the same time as global music star Akon is planning to create a crypto-city in Uganda. In April, Akon won government approval for a one-mile futuristic city operated by his Akoin cryptocurrency.

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