South Africa’s Financial Intelligence Centre (FIC) has issued a warning to the country’s expanding crypto community, labeling the crypto asset service provider (CASP) industry as posing a high inherent risk for money laundering and terrorist financing.
FIC recently released a sector assessment report in April 2025, which examines how vulnerable local CASPs are to being exploited for illicit financial activities.
According to FIC, as of February 10 2025, a total of 256 crypto asset service providers (CASPs) had registered with South Africa’s Financial Intelligence Centre (FIC) under new laws introduced in December 2022. However, the FIC warns that the real number of active operators could be much higher, as some entities may be functioning without proper registration.
South Africa’s
Financial Regulator, FSCA, Declares Crypto Assets as a Financial Product
A crypto asset is used as an investment vehicle… and it resembles a financial product – you invest in it, you get returns from it.” – FSCAhttps://t.co/FOAe4pMmy3
— BitKE (@BitcoinKE) October 21, 2022
“Based on available statistics, it is estimated that more than 5.8 million people (9.44% of South Africa’s total population) currently own crypto assets. Calculating the total value of these crypto assets is challenging, and due to the rapid changes in ownership, such information may not be accurate,” it adds.
According to FIC, several crypto asset service providers (CASPs) have headquarters outside of South Africa, even though they are active within the country. Likewise, some South African-based firms operate internationally, potentially raising the risk of money laundering and terrorist financing due to varying levels of regulatory oversight across regions.
25 South African firms are headquartered abroad, with Singapore, Switzerland, and the UK each hosting three of these companies. While there has been progress in regulatory clarity, the crypto sector still contends with lingering uncertainty around regulations.
The warning follows reports that AfriInvest and MutualWealth have been guaranteeing returns of up to $542 (R10,000) per day.
The firms claim to leverage artificial… pic.twitter.com/vmLHgXZ0gt
— BitKE (@BitcoinKE) April 4, 2025
Although regulatory transparency is gradually improving, the report highlights that the crypto industry continues to grapple with issues stemming from unclear or evolving regulations.
“Changes in regulations could have a significant impact on CASPs, and they need to stay agile and adapt to new rules. While the money-laundering and terrorist financing risks have technically been addressed by legislative changes, such legislative changes in respect of exchange control are still in the planning phase,” says the report.
“The lack of proper exchange control measures for crypto assets may also negatively impact on the money-laundering and terrorist financing risks associated with crypto assets.”
It further states that a significant number of South Africans lack a clear understanding of crypto assets and the services provided by Crypto Asset Service Providers (CASPs).
“Consumers need to be made aware of the use, storage and transfer value of crypto assets, and any concerns need to be addressed. Consumers also need to be informed about how they can fall victim to organised crime using them as money mules.”
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