If cryptocurrency is illegal, why hasn’t the Government outlawed it already?

By Mata'afa Keni Lesa 13 November 2018, 12:00AM

The issue of cryptocurrency is back on the agenda this week. 

It follows a public presentation at the National University of Samoa (N.U.S.), where an independent cryptocurrency entrepreneur from Zambia, Mapanza Nkwilimba, talked up the scheme as the way of the future. From that presentation, a story titled “Entrepreneur defends bitcoins, cryptocurrency” was published on yesterday’s front page. 

Truth be told, since Samoa was introduced to cryptocurrency, no one has taken the opportunity to explain to the public what it is and how people can benefit. Everything that has been said so far – including the countless warnings from the Government, which we will get to in a moment – has been negative.

So it was refreshing to hear a different perspective from Mr. Nkwilimba. By the way, don’t take us the wrong way; we’re not saying Mr. Nkwilimba has got it right, far from it.

“Bitcoin as a concept is something that is still very new and is misunderstood by many people,” he said. “It is misunderstood by institutions, but it has come to stay, and it’s real. Cryptocurrency has come to stay and banks that ignore it are at their own peril, and now global Central Banks are discussing cryptocurrency, how are the banks going to benefit from cryptocurrency.”

Well that’s interesting isn’t it? But perhaps a timely subject too since Samoa is hosting the 33rd Annual Pacific Central Bank Governors’ Meeting at Return to Paradise Resort today and tomorrow. 

Opened last night, the meeting guided by the theme “Strengthening Collaboration,” is being attended by Central Bank Governors and their respective delegations from Fiji, Papua New Guinea, Solomon Islands, Tonga, Timor Leste, Vanuatu, Australia, New Zealand and Samoa of course. 

Other key delegations include those from the International Monetary Fund (I.M.F.), World Bank, Asian Development Bank (A.D.B.), Pacific Financial and Technical Assistance Cooperation (P.F.T.A.C.) and the Pacific Financial Inclusion Programme. 

Today, we take the opportunity to extend a warm Samoan welcome to all the Governors and the delegates who are here for the meeting. We do hope you have a fruitful meeting and that you also find the time to check out our slice of paradise before you return home. We also hope they can share their experiences when it comes to the issue of cryptocrrency. 

Truth be told, it’s all a bit confusing for many members of the public in Samoa.

The reality is that many Samoans are already involved, given the lack of clarity on whether it is illegal or not. You see this is a small country where the word gets around quickly. What we do know about crytocurrency is that it had been heavily promoted by a few highly influential charismatic church leaders, who have remained anonymous.

 In the meantime, the Central Bank of Samoa, especially Governor Maiava Atalina Enari, have been extremely vocal against the number of cryptocurrency promotions. They have issued countless warnings against the scheme.

One warning said:  “There is currently a lack of information and public awareness as to how these cryptocurrency works, as such, this will often lead to people making ill informed decisions, such as investing in get rich quick schemes!”

 “There is also a high risk to Samoa’s economy, as certain cryptocurrencies may pose a security risk, such as vulnerability to cybercrime, and as a result, cause significant damage to our financial system and infrastructure.”

 “C.B.S. encourages the public to be alert and aware of these schemes. They may look like an attractive investment to quickly make more money, but you risk losing all your hard earned money without any possibility of recovering it.” 

Another warning from the Central Bank went a step further. It explained how the scheme works. For instance: “You invest $1,000 and then in four months, your cash is 10 times more, which means you cash in $10, 000. This is a snare that is used to catch people’s money.” 

The Central Bank also issued a directive to all financial institutions (predominantly commercial banks and money transfer operators) to block all foreign exchange transactions relating to Onecoin/ Onelife cryptocurrency promotions.

 “It has come to our attention that there are still a large number of people wanting to remit or transfer money out of Samoa to invest in this Onecoin cryptocurrency promotion.”

 “This is despite warnings by Central Bank of Samoa that there is a very high risk that Onecoin cryptocurrency promotion is a pyramid scheme (an illegal money making investment).

Under Samoa’s Exchange Controls Regulations 1999, no one can take money out of Samoa without the approval of the Central bank of Samoa.” 

 “As a result the Central Bank of Samoa has decided to block all approvals for any transactions relating to the Onecoin cryptocurrency.”

Even Prime Minister Tuilaepa Dr. Sa’ilele Malielegaoi joined the wagon, cautioning members of the public against it.

 “We have had people from overseas who came here to promote this scheme and we had them visit the Central Bank of Samoa (C.B.S.) and the end result was that this is just that – a scheme,” Tuilaepa said. 

Tuilaepa said people are easily fooled by the promised returns on their money.

Still it’s an interesting one, isn’t it? From what we’ve seen elsewhere, some people have benefitted from the scheme. 

The real question is whether it is legal. If the answer is no and that these promotions are pyramid schemes, why hasn’t the Government moved to outlaw them? If the Government doesn’t have such a law, why have they been talking about it for so long instead of passing a law? 

Our Parliament after all is a one-party state, which means any law Prime Minister Tuilaepa wants can be passed instantly. The question is, why are they hesitant? And who are they protecting? 

Tell us what you think?

Have a wonderful Wednesday Samoa, God bless!

By Mata'afa Keni Lesa 13 November 2018, 12:00AM

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