Financial Regulator: South African Crypto Exchanges Must Be Licensed by Year-End
South Africa’s Financial Sector Conduct Authority (FSCA) has mandated that all crypto exchanges register and obtain operational licenses by the end of 2023.
According to the regulator, firms that fail to comply with this guideline and continue operating without a license will face the possibility of closing down or paying fines.
The FSCA received about 20 applications following two weeks of opening license registrations.
Kamlana said during an interview in Pretoria that there is potential 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 with the industry to refine and make changes where and if necessary, he added.
South Africa became the first African country to mandate crypto exchanges to secure licenses. Most of Africa's top trading platforms sprouted from South Africa. These include Digital Currency Group's subsidiary Luno and Pantera-backed VALR.
Other global crypto exchanges like Binance have branches in South Africa and will now need a license.
Christo de Wit, manager of Luno's South African unit, says the firm has submitted its license application and awaits feedback from the FSCA.
Policymakers and regulators across the globe have moved to tighten their reign on the crypto industry.
The need for stringent rules and comprehensive scrutiny of crypto exchanges accelerated after the FTX-engineered crypto-wide mayhem.
Several global regulators have introduced rules to govern the crypto market. For instance, in May, EU lawmakers adopted the Markets in Crypto Assets (MiCA) regime, the region's first comprehensive rules dedicated to the crypto industry.
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