South Africa’s Financial Sector Conduct Authority (FSCA) is set to grant licenses to crypto asset service providers (CASPs) in the coming weeks.
Approximately 50 crypto companies are currently awaiting approval for their applications. Gerhard Van Deventer, the Head of Enforcement at the FSCA, confirmed this timeline with local south African news outlet.
Out of the 145 companies that initially applied for the CASP (crypto asset service provider) license, only 50 applications were submitted to the licensing committee in December 2023.
20 companies decided to withdraw their applications during this process, with Van Deventer mentioning the cost of obtaining the licensing and lack of experts as impediments.
Many in the crypto space see the move as a sign of an embracing of the technology in the country, with South Africa being the first country on the African continent to mandate the acquisition of licenses for digital asset exchanges.
“The requirement for licensing is a move in the right direction as it validates the operations of crypto companies,” said Christo De Wit, Luno Country Manager for South Africa.
In June 2023, FCSA asked cryptocurrency companies that wish to operate in South Africa to apply for a license from the authority within a six-month period, starting from June 1, 2023.
South Africa 🇿🇦 Warns All Crypto Exchanges to Obtain Licenses by November 2023 to Avoid ‘Enforcement Action’
If crypto exchanges continue to operate without obtaining a license after the deadline, the regulator is prepared to take 'enforcement action.' This action could… pic.twitter.com/tJjhy4jAqe
— BitKE (@BitcoinKE) July 7, 2023
According to Van Deventer, during the designated 6-month period for registration, firms that applied for licensing were permitted to continue their operations while regulators review and make a decision on their applications for approval.
Firms that did not apply for a license by November 30 2023 became non-compliant, with the regulator prepared to take ‘enforcement action.’ According to FCSA, the enforcement involved imposing fines or even shutting down non-compliant firms.
With the licensing regime, consumers now should only interact with crypto firms that are licensed, and the lack of a license should be considered a ‘red flag.’ Consumers should also look at what the firms are licensed for when investigating a crypto firm’s website.
Van Deventer said, while the licensing regime gives the regulator a greater handle on crypto scams, which have become widespread in South Africa, the scams will not entirely stop, and among the trends they’re seeing is that, the scams are moving to social media platforms.
The official also noted the proliferation of scams utilizing fake celebrity endorsements, such as Matrix as a ‘Bitcoin Trading Platform’ that has used images of Elon Musk and Patrice Motsepe.
He also reminded the public that the classic giveaway for crypto scams is the promise of offering unrealistic sums. According to their data, the unrealistic promises are no longer 6 or 1-month returns, but scams are now promising returns in a matter of hours.
Follow us on Twitter for the latest posts and updates
Join and interact with our Telegram community
___________________________________________
___________________________________________
