South Africa probes unlicensed crypto operations in industry crackdown

AFRICAN STOCKS AND FINANCEJuly 10, 2024 at 5:49 PM UTC

TLDR

FSCA investigates 30 cases of unauthorized crypto services, warns consequences for unlicensed activities.
South Africa's crypto regulatory framework progresses with 63 new licenses issued, total now at 138.
Compliance with licensing requirements critical as regulatory actions intensify in the crypto sector.

South Africa's regulator, the Financial Sector Conduct Authority (FSCA), is investigating 30 cases involving individuals or entities offering crypto services without the required legal authorization.

This action follows an earlier warning from the FSCA that "any entity that did not apply for a license and continues activities will be investigated, and there will be consequences for such actions."

This development comes as the country’s crypto regulatory framework begins to take concrete shape, with the first licenses recently issued to compliant firms. On July 2, the FSCA announced that it had granted 63 additional licenses, bringing the total number of crypto licenses in South Africa to 138.

Key Takeaways

In October 2022, the Financial Sector Conduct Authority (FSCA) declared that crypto assets are financial products, requiring crypto providers to apply for a Financial Service Provider (FSP) license. This declaration mandated licensing for crypto exchanges and marked a pivotal moment in South Africa’s crypto regulation journey. The FSCA granted a grace period until November 30, 2023, for submitting license applications, with the first set of licenses issued in the first quarter of 2024. Crypto exchanges Luno and Valr are among the first to receive this crucial authorization. The FSCA’s enforcement division has now established an investigation team to address cases involving entities offering crypto financial services without proper licensing.

South Africa

Cryptocurrency

Digital Assets

FSCA

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Virtual Assets