Cryptocurrency companies that wish to operate in South Africa will be required to apply for a license from the country’s Financial Sector Conduct Authority (FSCA) within a six-month period, starting from June 1 2023.
Although the new licensing regime for cryptocurrency companies in South Africa has been welcomed by local industry players, there are concerns about the potential consequences for those who fail to register within the designated timeframe.
“This is an extremely positive step for both the crypto industry and South Africans,” said Nick Taylor, Head of Public Policy at Luno for Europe, Middle East, and Africa.
“The licensing requirements that will flow from the FSCA’s classification will drive up standards, protect consumers, and give businesses the certainty to invest, innovate and create jobs,” Taylor added.
In November 2020, the Financial Sector Conduct Authority (FSCA) of South Africa put forth a proposal to classify cryptocurrencies as financial products and require companies offering crypto-related services to obtain a license. After conducting consultations on the proposed legislation, the FSCA published the final declaration on October 19, 2022, outlining the requirement for licensing in the crypto industry.
During the designated 6-month period for registration, firms that apply for licensing will be permitted to continue their operations while regulators review and make a decision on their applications for approval.
- Operating with integrity
- Maintaining diligence in their operations, and
- Promptly providing the Financial Sector Conduct Authority (FSCA) with any requested information
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