South Africa’s Financial Sector Conduct Authority (FSCA) says it received 128 applications for crypto asset service provider licences as of November 30 2023.
In a presentation providing an update on the licensing of cryptocurrency services in South Africa, the Financial Sector Conduct Authority (FSCA) stated:
- 93 applications were received as of October 31 2023
- 19 were withdrawn due to lack of experience and appropriate operational policies and procedures
The FSCA provided the following timelines for the 74 licence applications that remain under consideration:
- 36 completed assessments to be presented at the December 22 2023 Licensing Executive Committee meeting
- 22 applications pending for various reasons to be presented at the February 13 2024 Licensing Executive Committee meeting
- 14 applications with analysis yet to begin to be presented at the March 12 2024 Licensing Executive Committee meeting
- 2 undisclosed
Moreover, FSCA, which in July 2023 warned all service providers that they risked closure without licenses, conducted a survey that was responded to by 47 applicants revealing the composition of the crypto assets market:
FSCA crypto market survey 2023 — Financial services offered
The FSCA reported that it considered various factors in its analysis of each potential licensee. These factors include the significance of market services, whether they offer multiple services, and whether they provide market support services such as custodial and payment rails.
FSCA crypto market survey 2023 — Summary of business models
The evaluation process conducted by the FSCA also involved assessing applicants’ operational policies and procedures. This encompassed aspects such as:
- Know-Your-Customer onboarding (referred to as ‘FICA’ in South Africa)
- Data protection measures
- Cyber risk management
- Conflict of interest management
- Complaints handling
- Credit counterparty risk management
FSCA also conducted due diligence checks by collaborating with other regulatory authorities. This included engagements with entities such as the Payments Association of South Africa and the Reserve Bank Financial Surveillance department.
