South African Investment Manager Sygnia to Launch Crypto Exchange

Sygnia also plans a cryptocurrency investment fund in line with new digital growth strategy.

by Marin Marinov
28 May • 3 min
In Markets

Sygnia, one of the major investment management companies in South Africa, said it plans to launch a cryptocurrency exchange, dubbed SygniaCoin, this summer. The company, which manages ZAR 184 billion (USD 14.7 billion) in assets, also plans a fund for investment in virtual coins as part of its new strategy for growth in the digital world.

“The cryptocurrency market is evolving at a rapid pace internationally and domestically, and is attracting both domestic and international flows,” Sygnia said in its half-year financial statement. “With its fintech focus, Sygnia is well-positioned to become the first major financial services institution to embrace cryptocurrencies and to offer investors a secure trading and execution platform backed by an international infrastructure, well-designed custody and integration with standard savings products.

SygniaCoin

SygniaCoin is planned to be launched in the third quarter of 2018. The trading platform will be based in South Africa but it will follow the rules of BitLicense, the special crypto exchange permit of the US state of New York that was granted to several trading platforms, including Gemini, Coinbase and Genesis.

“To ensure the highest levels of integrity and security for clients, we are basing our policies, protocols and processes on existing regulatory framework applicable to cryptocurrency exchanges registered in New York State, USA,” Sygnia said.

Traders will be able to hold cryptocurrencies in their Sygnia accounts. It is yet unclear which cryptocurrencies will be offered on the trading platform.

Sygnia, which is the second largest multi-management company in South Africa with around 600 institutional and 6000 individual clients, also plans a crypto fund. Sygnia Cryptocurrency Fund will invest in various cryptocurrencies on behalf of investors.

South Africa and crypto world

Cryptocurrency trading and investing in digital coins are subject to taxes in South Africa. The country’s 2018/19 budget defined cryptocurrencies as “digital assets that may be used as a medium of exchange”. Sygnia expects the regulation around cryptocurrency exchanges to develop further.

Last week, South Africa’s central bank called cryptocurrencies like Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP)  “cyber-tokens”, not currencies, because digital coins do not “meet the requirements of money”.