Key takeaways:
- South Africa will demand that crypto exchanges there operate with licenses.
- The regulator plans to take “enforcement action,” which might involve shutting down the businesses or fining them.
According to the nation’s financial regulator, South Africa will demand that crypto exchanges there operate with licenses by the end of the year.
Bloomberg reported that by the end of the year, South Africa would force cryptocurrency exchanges to obtain licenses. The Financial Sector Conduct Authority (FSCA) has received about 20 applications since it opened for licenses a few weeks ago, and more are expected before the deadline of November 30, according to FSCA Commissioner Unathi Kamlana in an interview.
The regulator plans to take “enforcement action,” which might involve shutting down the businesses or fining them if they carry on operating without a license after the deadline. Kamlana continued:
“There is potentially serious harm to financial customers when using crypto products, and therefore it makes sense for us to introduce the regulatory framework. Time will tell the effectiveness of our measures, and we will continue to work together with the industry to refine and make changes where and if necessary,”
As policymakers and authorities continue to tighten the regulations surrounding cryptocurrencies worldwide, South Africa becomes the first nation on the continent to mandate that digital asset exchanges obtain licenses.
Recent years have seen some of the biggest cryptocurrency frauds in the history of the world take place in South Africa, costing billions of dollars in assets. The first to seek secure licensing for digital asset exchanges is the continent’s most developed economy.
Many of the biggest trading platforms on the continent are based in South Africa, including VALR, which is backed by Pantera, and Luno, which Barry Silbert’s Digital Currency Group (DCG) owns. There are other international platforms in the country, including Binance, and they will need permission.
According to South Africa’s financial regulatory body, operating permission for cryptocurrency platforms must be granted by 2023. South African Bitcoin financial institutions must apply for a license between June 1 and November 20, 2023, in order to operate legally.
The Markets in Cryptoassets (MiCA) bill, which would establish the first legislation for the cryptocurrency industry outside of South Africa, has received final approval from European legislators in addition to South Africa, and Hong Kong just unveiled new regulations to license exchanges.
