March 18, 2024

FSCA Grants Regulatory Nod to 59 Crypto Firms in South Africa

South Africa's Financial Sector Conduct Authority (FSCA) greenlights 59 operating licenses for cryptocurrency businesses.

South Africa's Financial Sector Conduct Authority (FSCA) has given the green light to 59 cryptocurrency exchanges to operate within the country, a Reuters report cites an official source from the regulatory body.

Out of over 300 crypto providers in South Africa seeking regulatory approval, only 59 have met the standards set forth by the FSCA. Under South African law, digital asset exchanges are mandated to obtain licenses to conduct operations.

In 2022, the FSCA classified cryptocurrency assets as financial products, highlighting the necessity of regulation to safeguard financial consumers against risks like money laundering and terrorism financing. The regulatory body set a deadline of November 30 for exchanges to apply for licenses, warning of enforcement actions for non-compliance.

FSCA Commissioner Unathi Kamlana stated in a recent interview with Bloomberg:

"We are processing those licensing applications and we’re doing so in a phased kind of manner given the numbers."

In 2021, the FSCA released a paper outlining plans to integrate crypto assets into South Africa's regulatory framework in a structured manner. The paper provided a roadmap for regulating crypto assets through the supervision of crypto asset service providers (CASPs).

The FSCA underscored the inherent risks of crypto assets in a newsletter from 2021, citing their decentralized and disintermediated nature, which poses challenges for consumer protection and recourse in case of errors or misconduct.

With the surge in retail interest in crypto assets, instances of consumer abuse, fraud, and market misconduct have been on the rise both domestically and internationally, prompting the FSCA to take decisive action to curb market abuse under the guise of crypto assets.

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