South Africa’s Financial Sector Conduct Authority (FSCA) to Review 36 Crypto Service Providers
The Financial Sector Conduct Authority (FSCA) in South Africa has announced that it will review 36 applications from crypto service asset providers (CASPs) during its next meeting in December. The FSCA received a total of 128 applications, with the remaining ones being discussed in future meetings. The regulator will evaluate various factors such as Know Your Customer onboarding, data protection, cyber risk management, and complaints handling to determine the fate of these applications.
Majority of Traded Cryptocurrencies in South Africa are Unbacked
A recent study published by the FSCA revealed that 60% of all traded cryptocurrencies in South Africa are categorized as “unbacked crypto assets.” This includes cryptocurrencies other than stablecoins and nonfungible tokens (NFTs). The study also highlighted that the average annual revenue for crypto asset providers in South Africa ranges from 1 to 50 million South African rand ($53,000 to $2.7 million), with only 8% earning more than 100 million rand ($5.4 million).
High Transaction Value Recorded in November 2022
The highest monthly transaction value on the South African crypto market was recorded in November 2022, reaching over 8 billion rand (approximately $427 million).
FSCA’s Warning and Enforcement Action
In July 2023, the FSCA issued a warning stating that all CASPs operating in South Africa must obtain a license by the end of the year. Failure to comply may result in enforcement actions such as fines or closure of operations.
Hot Take: Crypto Regulation Progress in South Africa
The Financial Sector Conduct Authority (FSCA) in South Africa is making progress in regulating the crypto industry. With the review of 36 crypto service provider applications, the FSCA aims to ensure compliance with key standards such as data protection and cyber risk management. The study revealing the majority of traded cryptocurrencies being unbacked sheds light on the market composition in South Africa. As the country’s crypto market continues to grow, it becomes crucial for CASPs to obtain licenses and adhere to regulatory requirements set by the FSCA.
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