Recommendations to Bitcoin (Cryptocurrency) trading on the Securities and Exchanges Market of Ghana(Part 6 of six)
This final chapter of my paper will make some recommendations to government and stakeholders who matter: Ghana Revenue Authority, Bank of Ghana, Securities and Exchanges Commission and any related and relevant institution in Ghana as far as the subject-matter is concerned. Based on my submission above, I hereby make these recommendations accordingly:
- I call for the establishment of a Crypto Securities and Exchange Department (CrypSED) to operate under the Securities and Exchange Commission to oversee, regulate, license and coordinate the cryptocurrency industry in Ghana. My proposed CrypSED will not dabble in the functions of the SEC, Ghana but rather will be a department under the SEC and shall augment the functions of SEC in respect of bitcoin and other cryptocurrency trading and exchanges in the country. I would proceed to indicate its functions under SEC:
- To pioneer research into cryptocurrency and advise state institutions and private companies on the subject matter.
- To certify blockchain developers, crypto exchange and securities traders, digital wallet providers, miners and cryptocurrency agents.
- To develop a legal policy frameworks for cryptocurrency stakeholders to operate within in Ghana.
- To monitor the blockchain technology and pioneer its development and regulation in Ghana.
- To monitor electronic payments under the use of cryptocurrency as a means of payment.
- To control cryptocurrency investment in Ghana.
- To license and approve cryptocurrency exchange and securities companies in Ghana.
- To develop regulations and requirements of trading in crypto securities and exchanges in Ghana.
- To pioneer collaborations with State institutions such as Parliament to develop legislations to regulate cryptocurrency trading in Ghana.
- To complement the activities of the SEC.
- To share information and examine data on the blockchain with Ghana Revenue Authority to fight against tax evasion and avoidance in Ghana.
- To propound regulations and best practice cooperation with other State institutions to fight money laundering on the blockchain technology as well as financed terrorism and illegal activities.
- Guide and license Initial Coin Offerings.
- To suspend or revoke licenses issued to crypto companies or agents who infringe on the regulations and the laws of Ghana.
- To shut down crypto platforms on the internet which are operating illegally in the jurisdiction of Ghana.
- To ensure that investor funds are different from crypto companies’ funds and that upon liquidation investors or users are paid their investments or funds.
- To ensure that cryptocurrency companies have well-built technological infrastructure to operate and avoid loss of ledger.
- To ensure that cryptocurrency companies protect data and personal information of users in line with the Data Protection Act.
Below is a graphical outline of this department under SEC and how it will interact with main government institutions but not limited to, in the industry.
Fig 1. Graphical outline of CrypSED under SEC
The above figure 1 demonstrates the graphical operation of the crypSED under the SEC. As already explained.
- That I call for the amendments to Income Tax Act 2015 (Amendment), Act 896 to provide for anti-tax avoidance provisions that deal with tax avoidance in respect of cryptocurrency
- Blockchain technology and legal Infrastructure:
The blockchain is at the heart of the cryptocurrency ecosystem. It is important for the stakeholders as I have mentioned to develop technical infrastructure that can better detect suspicious dealing on the blockchain. This would depend on two things, the pro activeness of my proposed crypSED under SEC and the second would be based on users reporting suspicious service providers to the SEC through crypSED for action. Further to this the SEC and the Central Bank may jointly or independently build a strong infrastructure to eliminate pseudo-anonymity of virtual currency users which conceals the legal identity of users. This feature is one of the main vehicles used on the blockchain technology by criminals to defraud users and to further conceal transactions which are potentially for the purposes of money-laundering and tax evasion. Regulations must cause a change in this cryptocurrency trading and exchanges while not interfering with private transaction dealings.
- Compliant office: The crypSED under the SEC must have a complaint desk that would receive all petitions relating to cryptocurrency fraud or irregular transactions on the market. crypSED must conduct investigations within a reasonable period as may be prescribed by law or regulation. Where there is criminality, the Ghana Police Service would be involved.
- Cryptocurrency education to the general public: The relevant state institutions particularly the SEC, Central Bank and Ghana Revenue Authority amongst other agencies should jointly or independently spear-head educational campaigns about cryptocurrency trading and exchanges. This will make the general public more conscious about virtual currencies and its related benefits and risks as well as other illegal or criminal activities associate with it.
- Regulation on the issues of Initial Coin Offerings (ICOs) by cryptocurrency companies: This paper has already explained into detail what ICOs mean. I call on SEC to ensure that these ICOs are regulated in the same manner as Initial Public offering (IPOs).
- I further call on lawyers and judges to respectfully acquaint themselves with the emerging trends of cryptocurrencies, its trade and exchanges to better position them to administer justice.
- The Ghana Revenue Authority must team up with miners and developers who have been certified to operate by crypSED of the SEC to monitor and trace transactions for taxation on the blockchain.
This paper is purposed to the educated lay reader and further points out the lapses in the law the users of cryptocurrencies are exploiting to their advantage. Also, this is to argue out that bitcoin is a security and that SEC should embrace itself to formulate rules, regulations fomented under legislations to regulate the cryptocurrency industry. I also called on stakeholders such as Ghana Revenue Authority, Central Bank and the Securities and Exchanges Commission to deal with the lapses in our laws. I called on lawyers and judges to learn more about cryptocurrencies so they will better understand such cases when they come before them and finally, made recommendations.