Regulatory Crackdown on Unauthorized Crypto Promotions
Ghana’s Securities and Exchange Commission (SEC) is now enforcing the new Virtual Asset Service Providers (VASP) law.
The regulator actively warns celebrities and social media influencers against promoting cryptocurrencies without a license. Under the VASP law, only duly licensed individuals and entities may legally advertise or advocate for virtual assets.
Consequences for Breaching VASP Rules
The SEC Director General, Mr. Thompson, stressed clear VASP law guidelines for promotion.
“The virtual asset space is volatile. Specific rules now govern all advertisement and advocacy,” he stated.
He warned that breaches would attract sanctions, urging influencers to first consult the SEC and Bank of Ghana for the regulatory framework.
“Only licensed persons can engage in promotion. There are consequences for breaches,” Thompson emphasized.
Protecting Investors and Market Integrity
The enforcement of the VASP law aims to protect investors and ensure market integrity. Regulators highlight concerns over schemes like “pump and dump,” where influencers hype an asset before selling, leaving retail investors with losses. Tighter controls on promotion under the VASP law seek to reduce these risks, especially as crypto interest grows among Ghana’s youth.
Parliament Approves Groundbreaking VASP Framework
This warning follows Parliament’s approval of the Virtual Asset Service Providers Bill, which legalizes and regulates crypto activities.
Bank of Ghana Governor Johnson Asiama stated the VASP law creates a framework to license platforms and supervise the market. “We now have the framework to manage the risks,” Asiama noted, calling it an enabler of stronger supervision.
Enhanced Oversight for a Growing Crypto Market
The VASP law introduces enhanced oversight, with the Bank of Ghana as primary regulator. This responds to data showing significant local crypto adoption, with an estimated $3 billion in transactions processed recently.
The VASP law empowers regulators to license exchanges and wallet providers, though the cedi remains Ghana’s sole legal tender.
Ghana Joins Regional Trend in Crypto Regulation
With the VASP law, Ghana joins other Sub-Saharan African nations like Kenya and South Africa in establishing a clear digital asset regulatory framework, promoting safer and more responsible participation in the crypto market.
