South African Crypto Implements Stricter Regulations Exchanges Licenses Now Mandatory

Bloomberg reports that by the year’s end, South African crypto will mandate cryptocurrency exchanges to obtain a license.

South African Crypto Implements Stricter Regulations Exchanges Licenses Now Mandatory

In a recent interview, FSCA Commissioner Unathi Kamlana stated that since the licensing process began a few weeks ago, approximately 20 applications have been received by the Financial Sector Conduct Authority. It is expected that more applications will be submitted before the November 30 deadline.

Kamlana further emphasized that if crypto exchanges continue to operate without obtaining a license after the deadline, the regulator will take necessary “enforcement action.” Such actions may include the possibility of shutting down the exchanges or imposing fines on them.

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.”

Unathi Kamlana

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South Africa has witnessed a series of significant cryptocurrency frauds in recent years, leading to the loss of billions of dollars in assets. As the most advanced economy on the continent, South African crypto has taken the initiative to establish a requirement for secure licensing of digital asset exchanges. Numerous major trading platforms in Africa, such as Luno (controlled by Barry Silbert’s Digital Currency Group) and VALR (supported by Pantera), are based in South Africa. In addition to these local platforms, global exchanges like Binance also operate in the country and will now be obligated to obtain permits.

In line with regulatory measures, the South African crypto financial authority announced in the previous year that crypto platforms must obtain permits to continue their operations by 2023. Compliance with the law requires cryptocurrency financial institutions in South Africa to submit license applications between June 1 and November 20, 2023.

Furthermore, European legislators have recently granted their ultimate endorsement to the Markets in Cryptoassets (MiCA) bill, a pioneering legislative initiative within the European Union aimed at establishing regulations for the crypto industry. Simultaneously, Hong Kong introduced new regulatory frameworks in the previous month to license cryptocurrency exchanges, further emphasizing the global trend towards implementing comprehensive regulations in the crypto sphere.