The South African Financial Regulator (FSCA) has required cryptocurrency exchanges in the country to be licensed by the end of the year.
South Africa Requires Licensing Of Cryptocurrency Exchanges By The End Of The Year
FSCA Commissioner Unathi Kamlana said in an interview that the Financial Sector Conduct Authority has received nearly 20 applications since opening for licenses a few weeks ago, with more expected before the November 30 deadline.
Kamlana said the regulator plans to take “sanctions” that could result in companies being shut down or fined if they continue to operate unlicensed after the deadline.
“Potentially serious harm is done to financial customers when using crypto products and so it makes sense for us to put the regulatory framework in place,” Kamlana said in Pretoria.
“Time will tell the effectiveness of our measures and we will continue to work with the industry to make changes and improve as needed.”
Africa's most developed economy, the first on the continent to require licensing of digital asset exchanges.
Several of the continent's biggest trading centers have emerged from South Africa, including Luno, owned by Barrry Silbert's Digital Currency Group, and VALR, backed by Pantera.
Other global platforms such as Binance also operate in the country and will need to be licensed.
Over the past few years, South Africa has been the backyard of the world's biggest crypto scams, resulting in the disappearance of billions of dollars in investments.
These include the disappearance of 70,000 Bitcoins from a platform called Africrypt run by the Cajee brothers in 2021 and the fraudulent multi-level marketing scheme called Mirror Trading International Proprietary.
It is not investment advice.