More than 300 cryptocurrency platforms in South Africa have applied to the Financial Sector Conduct Authority (FSCA) for operating permits.

Last year crypto-asset providers were given until 30 November to apply for a licence to operate or risk facing enforcement action, reports Businesstech.

The platforms will be regulated under the same legislation as traditional financial service providers, the Financial Advisory and Intermediary Services Act (FAIS), according to FSCA commissioner Unathi Kamlana.

Kamlana says the applications were being processed in phases, and the first 60 cryptocurrency platforms would be licensed by the end of March.

Licensing under the FAIS Act, which focuses on ensuring the honesty, integrity, competency and ability of all financial services providers, means crypto consumers will have legal recourse if a service provider breaches legal requirements.

The licensing makes South Africa one of a few countries on the continent that require crypto-asset providers to have a permit to operate. In 2022, Botswana became the first African country to issue a permit to a cryptocurrency platform, Yellow Card Financial.

‘As we license and supervise, we will discover that perhaps there are gaps that cannot be closed by the existing regulatory framework, the FAIS Act,’ says Kamlana. ‘And we might need to build on that as we discover what those are.’

19 March 2024
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