South Africa's financial services regulators, the Financial Sector Conduct Authority (FSCA), have declared that anything to do with cryptocurrencies is suspect.
"Every con man is using cryptocurrency, so people should be very careful when dealing with anything related to encryption," said FSCA head of investigations and oversight Brandon Topham.
"Not all players on the field are [crooks], hence the need to regulate the advisors and intermediaries in that field. [So] if people are going to choose to 'invest', at least they're using legitimate suppliers."
Topham said this kind of regulation is what South Africa's financial regulators are working on.
"There are some very good developments and technologies coming from the cryptographic world, but because it has limited traceability, it is the method of choice for criminals to escape,"Topham said
"If we can regularize the industry a little, we will have more certainty and credibility for users. It is currently free for everyone. "
Play cryptocurrencies like gambling
Asked about his statement easing "playing" in cryptocurrencies to gambling, Topham told MyBroadband that gambling may be too liberal a term.
"Speculating on an asset that has no legal basis, no legal entity to pay to the bearer and your only chance of being paid in the future is a 'hope' that someone, anyone, somewhere will give you some value for your cryptographic asset amounts to something … maybe gambling is too liberal a word."
Topham said it might be more like buying a lottery ticket than betting on a casino.
"As long as people have confidence in encryption, it may have some value, but if you look at the many cryptographic assets that have been released, failed and lost value, I think the point is clear. It's a bet. "
Topham also said that people interested in cryptocurrency should prefer to go to a casino because it is at least a regulated industry.
"A casino will play according to the rules of the rules on gambling," he argued.
"There are no rules in cryptography, so if you want to take a chance on someone who will pay you in the future, so be it."
Topham emphasizes that this does not mean that the government is seeking to ban cryptocurrencies.
"We support everyone's right to buy and use encryption. Just understand that there is no certainty as to the value you will have (or will not) in the future."
No cryptocurrency regulation in South Africa
MyBroadband also asked Topham to clarify its observations that cryptocurrencies will never be regulated in South Africa.
"Based on all the current discussions of our financial sector participants - and most countries - the crypto-assets themselves probably cannot be regulated. [That's why] people like it,"Topham said
"However, we want to limit the risks by regulating the consulting services and intermediaries that accompany encryption."