South Africa reportedly becomes the first country on the continent to require digital asset exchanges to be licensed.
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South Africa’s financial regulator has announced that all crypto exchanges in the country will be required to obtain licenses by the end of the year, according to a report by Bloomberg.
Financial Sector Conduct Authority (FSCA) commissioner Unathi Kamlana stated that the agency had received approximately 20 license applications since its recent opening and expected more before the Nov. 30 deadline, Bloomberg reported.
Kamlana further mentioned that if crypto exchanges continue to operate without a license after the deadline, the regulator intends to take “enforcement action,” which may involve fines or the closure of noncompliant firms, according to the report.
The report quoted Kamlana as saying that introducing a regulatory framework for crypto products is a sensible approach due to the potential risk of serious harm to financial customers. He also expressed the need for time to determine the effectiveness of the measures, and assured ongoing collaboration with the industry to refine and implement necessary changes.
This initiative means South Africa becomes the first country on the continent to require digital asset exchanges to obtain licenses as crypto regulators and policymakers worldwide continue to tighten crypto regulations.
The move affects several major trading venues originating from South Africa, including Digital Currency Group-owned Luno and the Pantera Capital-backed VALR crypto exchange. Global platforms such as Binance that operate in the country will also need to secure licenses.
According to an FSCA spokesperson, individuals providing financial services in crypto assets, excluding certain exceptions like crypto miners and NFT service providers, must obtain authorization. Failure to comply with this requirement constitutes a violation of the law and regulatory action may be initiated by the relevant authorities.
Related: Crypto exchange Roqqu receives South African approval to expand operations
The FSCA has been involved in crypto and fintech regulations, collaborating with an “inter-governmental fintech working group” consisting of major financial sector regulators and policymakers, including the National Treasury and the South African Reserve Bank.
The trend of intensifying regulations is not confined to South Africa alone. On July 3, the Monetary Authority of Singapore announced that crypto service providers in the country are required to place customer assets into a statutory trust by the end of the year for secure storage. This action underscores a global shift toward more stringent regulation in the cryptocurrency sector.
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