Report: South Africa to mandate crypto exchange licenses by year-end

South Africa is taking steps to regulate its cryptocurrency exchanges, as the country’s financial regulator has recently announced that all crypto platforms must obtain licenses by the end of the year. This move positions South Africa as a pioneer on the continent in terms of requiring digital asset exchanges to meet specific regulatory requirements.

According to Bloomberg, the Financial Sector Conduct Authority (FSCA) has already received around 20 license applications since opening the process, and more are expected before the November 30 deadline. FSCA Commissioner Unathi Kamlana emphasized that after the deadline, the regulator plans to take enforcement action against exchanges operating without a license, which could involve imposing fines or even closing noncompliant firms.

Kamlana expressed the rationale behind introducing a regulatory framework for crypto products, highlighting the potential risks posed to financial customers. He stressed the importance of allowing time to evaluate the effectiveness of the measures and assured ongoing collaboration with the industry to refine and implement necessary changes.

This development impacts various prominent trading platforms that originated in South Africa, including Luno, which is owned by Digital Currency Group, and VALR, backed by Pantera. It also extends to global platforms like Binance, which operate within the country and will now need to secure licenses to continue their operations.

The FSCA has been actively involved in shaping crypto and fintech regulations, working alongside an “inter-governmental fintech working group” comprising key financial sector regulators and policymakers, including the National Treasury and the South African Reserve Bank.

South Africa’s move aligns with a broader global trend of tightening regulations surrounding cryptocurrencies. In Singapore, for example, the Monetary Authority of Singapore (MAS) recently announced that crypto service providers must place customer assets into a statutory trust by year-end to ensure secure storage. This shift underscores the increasing emphasis on more stringent regulations within the cryptocurrency sector worldwide.

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