South Africa Regulator, FSCA, to Issue First Batch of Crypto License
The Financial Sector Conduct Authority (FSCA) of South Africa issues licenses to providers of crypto asset services (CASPs) in the next few weeks. Crypto South Africa Regulation
50 crypto companies are currently in the process of awaiting approval for their applications. Gerhard Van Deventer, the Head of Enforcement at the FSCA, confirmed this in an interview.
Initially, 145 companies applied for the CASP (crypto asset service provider) license. However, only 50 applications were ultimately submitted to the licensing committee in December 2023.
During the application process, 20 companies withdrew their applications. Van Deventer cites the high cost of obtaining the license and a lack of experts as the main reasons for their withdrawal.
This move towards licensing is seen by many in the crypto space as a positive step towards embracing the technology in South Africa. It is the first country on the African continent to mandate the acquisition of licenses for digital asset exchanges. Crypto South Africa Regulation
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Christo De Wit, Luno Country Manager for South Africa, expresses his support for the licensing requirement, stating that it validates the operations of crypto companies.
In June 2023, the FCSA announced that cryptocurrency companies wishing to operate in South Africa must apply for a license within six months. Starting on June 1, 2023.
During the designated 6-month registration period, firms that submitted their licensing applications were allowed to continue their operations while regulators reviewed and decided on their approval. Firms that fail to apply for a license by November 30, 2023, are considered non-compliant. The regulator is prepared to take enforcement action, which may include imposing fines or shutting down non-compliant firms.
With the implementation of the licensing regime, consumers should now only engage with crypto firms with valid licenses. The absence of a license should be seen as a warning sign. Additionally, consumers should carefully examine licenses held by crypto firms when investigating their websites.
According to Van Deventer, the licensing regime provides the regulator with better control of crypto scams in South Africa. However, it is important to note that these scams will not completely disappear. One emerging trend is the migration of scams to social media platforms.
The official highlight is the increasing number of scams that exploit fake celebrity endorsements. For instance, Matrix, posing as a ‘Bitcoin Trading Platform,’ has used images of Elon Musk and Patrice Motsepe to deceive individuals. Crypto South Africa Regulation
