Cryptocurrency NewsSouth Africa’s financial regulator to require licenses for crypto exchanges by year-end

South Africa’s financial regulator to require licenses for crypto exchanges by year-end

The Financial Sector Conduct Authority (FSCA) of South Africa has issued a requirement for all cryptocurrency exchanges operating within the country to obtain licenses by the end of this year. The FSCA has already received approximately 20 license applications since the licensing process began a few weeks ago.

The FSCA’s representative, Kamlana, has warned that crypto exchanges operating without licenses after the deadline will face enforcement actions, such as closure or fines. In an interview, FSCA Commissioner Unathi Kamlana stated that more applications are expected before the November 30 deadline. Kamlana emphasized the regulator’s readiness to take enforcement action, including shutting down or imposing fines on firms that continue to operate without a license.

Kamlana highlighted the potential risks to financial customers in using cryptocurrency products and stated that implementing a regulatory framework is a logical step to mitigate these risks. The FSCA is committed to monitoring the effectiveness of its measures and working with the industry to make any necessary adjustments.

South Africa, known as the most advanced economy in Africa, has become the first country on the continent to mandate licenses for digital asset exchanges. Prominent trading platforms such as Luno, owned by Barry Silbert’s Digital Currency Group, and Pantera-backed VALR have emerged from South Africa.

The introduction of a regulatory framework for crypto products by the FSCA is driven by concerns about potential harm to financial customers. The FSCA has collaborated with intergovernmental fintech working groups and key regulators, including the National Treasury and the South African Reserve Bank, to develop regulations for the crypto and fintech sectors.

This announcement coincides with regulatory actions taken by U.S. regulators, particularly the Securities and Exchange Commission’s actions against cryptocurrency firms, which have led to a narrative of seeking innovation-friendly jurisdictions abroad. With South Africa providing clear regulatory direction, some view it as a potential overseas refuge for the crypto industry.

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