The Financial Intelligence Authority (FIA) has asked the Ministry of Finance to come up with a framework in which cryptocurrency operations can be regulated.
Speaking to a group of non-profits organisations and non-government organisations in Kampala at the weekend, Mr Sydney Asubo, the FIA executive director, said they have been asking cryptocurrency operators to register but very few have responded with the vast majority continuing to operate illegally.
“Virtual assets service providers are now in category 16 of the most vulnerable to terrorism financing and money laundering.
Last year we gave them one month to register but only a few responded,” he said, noting many cryptocurrency operators continue to operate illegally, which makes it difficult to regulate their activities.
A number of people have been cheated by pyramid and cryptocurrency companies that claim to offer out-of-the-world returns on investment. However, Mr Asubo said there is a need to know people and organisations that operate virtual asset companies to protect users and the larger economy.
During the meeting, non-government organisations led by the Defenders Protection Initiative, presented a policy brief to FIA in which they request to be declassified from the list of an accountable person under the second schedule to the Anti-money Laundering Act.
Mr Yona Wanjala the Defenders Protection Initiative chief executive officer, said the Anti-Money Laundering Act, categorises not for the profits sector as the fifteenth most vulnerable institution to be used as a conduit for the transmission of terrorism financing and money laundering.
However, three separate risk assessments undertaken by FIA to understand the institutions which are highly susceptible, do not mention non-government organisations among them.