South Africa’s financial regulator has announced that all cryptocurrency exchanges operating as virtual asset service providers in the country must secure licenses by the end of the current year, per Bloomberg reports. Making South Africa the first country in Africa to mandate licenses for virtual asset service providers.
According to South Africa’s Commissioner of the Financial Sector Conduct Authority (FSCA) Unathi Kamlana, the agency has received about 20 license applications since it unveiled the latest initiative, adding that the agency is looking to receive more applications before the deadline on November 30.
The Commissioner further warned that the country’s financial watchdog is planning to enforce “disciplinary action” against virtual asset service providers operating without a license in South Africa after the deadline. Such actions could involve fines or the closure of non-compliant firms.
Kamlana argued that the introduction of a regulatory framework for crypto products is a logical step due to the potential risk of significant harm to financial customers. He also emphasized the need for time to evaluate the effectiveness of these measures and pledged ongoing collaboration with the industry to refine and implement necessary changes.
This regulatory move will impact several major trading platforms originating from South Africa, including Luno, owned by the Digital Currency Group, and the Pantera Capital-backed VALR crypto exchange. Global platforms like Binance, which operate in the country, will also need to secure licenses.
The FSCA has been actively involved in crypto and fintech regulations, working with an “inter-governmental fintech working group” composed of significant financial sector regulators and policymakers, including the National Treasury and the South African Reserve Bank.
This trend of tightening regulations is not exclusive to South Africa. On July 3, the Monetary Authority of Singapore announced that crypto service providers in the country must place customer assets into a statutory trust by the end of the year for secure storage. This move highlights a global shift towards more stringent regulation in the cryptocurrency sector.
