South African Crypto Licenses Set to Be Issued for the First Time: Confirmed by FSCA Representative
In a significant move for the crypto industry in South Africa, Gerhard Van Deventer, head of divisional enforcement at the Financial Sector Conduct Authority (FSCA), announced on the Moneyweb Crypto podcast that the country is on the brink of issuing financial service provider (FSP) licenses to crypto companies.
The FSCA, the regulatory body overseeing the issuance of FSP licenses to crypto companies, had set a deadline of November 30, 2023, for crypto companies operating financial services related to crypto assets to submit their licence applications as part of the new regulatory framework under the FAIS Act No. 37 of 2002.
By mid-2024, the FSCA reported receiving a total of 383 licence applications from Crypto Asset Service Providers (CASPs). Of these, 138 licences had been approved, 5 applications were declined primarily due to failure to meet fit and proper requirements, and 80 applications had been voluntarily withdrawn by applicants after regulatory engagements about their business models.
This data provides the most current official count on South African crypto company licence applications as of mid-2024, reflecting the state shortly after the December 2023 deadline. The ongoing regulatory clarity in South Africa continues to facilitate mainstream developments in the crypto space.
Some applicants dropped out because crypto was not their primary business and they were not prepared to handle the latest regulatory burden. Gerhard Van Deventer stated that crypto companies that did not submit applications before the deadline must cease operations.
The issuance of FSP licenses to crypto companies is intended to provide regulatory oversight and protect users from potential scams. This move could potentially attract more investment and innovation in the crypto industry in the country.
Meanwhile, the number of South Africans using cryptocurrencies is rapidly increasing, with estimates suggesting that around 10% of the population is now using bitcoin and other cryptocurrencies. The partnership between Triple-A and Paycorp allows South African users of the CryptoExpress app to withdraw cryptocurrencies as cash from over 3,000 ATMs in the country, bridging the gap between digital and traditional currencies.
The discrepancy between Deventer's claim and the FSCA's previously stated number of crypto license applications may indicate ongoing developments and changes in the regulatory landscape for cryptocurrencies in South Africa. The FSCA planned to address 36 applications on Dec. 12, 2023, with the remaining applications to be reviewed in two phases: Feb. 13, 2024, and Mar. 12, 2024.
Entities that applied for FSP licenses may continue operating under certain conditions until the results are announced. The announcement by Gerhard Van Deventer indicates a significant shift in South Africa's regulatory approach towards cryptocurrencies and the crypto industry. The partnership between Paycorp and Triple-A aims to provide a convenient way for crypto holders in South Africa to access and use their digital assets.
[1] Source: Financial Sector Conduct Authority (FSCA) website and press releases.
- The Financial Sector Conduct Authority (FSCA) in South Africa has set a deadline of November 30, 2023, for crypto companies to submit their license applications as part of the new regulatory framework under the FAIS Act No. 37 of 2002.
- By mid-2024, the FSCA reported receiving a total of 383 licence applications from Crypto Asset Service Providers (CASPs), with 138 licenses approved, 5 applications declined, and 80 applications voluntarily withdrawn by applicants.
- Gerhard Van Deventer, head of divisional enforcement at the FSCA, stated that crypto companies that did not submit applications before the deadline must cease operations.
- The issuance of FSP licenses to crypto companies is intended to provide regulatory oversight and protect users from potential scams, potentially attracting more investment and innovation in the crypto industry in South Africa.
- The partnership between Paycorp and Triple-A aims to provide a convenient way for crypto holders in South Africa to access and use their digital assets through the CryptoExpress app, bridging the gap between digital and traditional currencies.
