South Africa Prepares to Grant Initial FSP Licenses to Cryptocurrency Providers

South Africa Prepares to Issue First Batch of FSP Licenses to Crypto Providers

South Africa is getting ready to grant the first batch of financial services provider (FSP) licenses to crypto service providers in an effort to combat scams and fraud in the sector. Gerhard van Deventer, head of enforcement at South Africa’s Financial Sector Conduct Authority (FSCA), confirmed this development during a podcast on Moneyweb Crypto.

According to Van Deventer, the move will make it easier for authorities to shut down crypto scammers before they can carry out their fraudulent activities. This comes as fraud cases related to the crypto sector in South Africa increased by 25% in the last quarter of 2023, as reported by Sumsub.

The FSCA received applications from 128 crypto firms that are already operating, with overwhelming responses from crypto service providers after cryptocurrencies were declared financial products in October 2022.

South Africans Embrace Crypto Payments

In recent data released by the FSCA, it was revealed that 10% or 6 million South Africans currently hold cryptocurrencies. There has also been a rise in cash withdrawals from crypto ATMs across the country following a collaboration between Paycorp and Triple-A, which allows users to withdraw cash using their cryptos at over 3,000 ATMs.

Crypto service providers in the country are eagerly awaiting the approval of licenses for those who meet the requirements. Industry experts believe that these licensing measures will contribute to the growth and regulation of the crypto space in South Africa.

Hot Take: South Africa Takes Action Against Crypto Scams

South Africa’s decision to issue FSP licenses to crypto service providers is a significant step towards curbing scams and fraud in the industry. With an increase in fraud cases and the growing popularity of cryptocurrencies among South Africans, it is crucial to have proper regulation in place.

The licensing requirement not only validates the operations of crypto companies but also ensures the protection of consumers and promotes the commercial interests of all parties involved in the crypto ecosystem. This move by the government demonstrates its commitment to fostering a safe and thriving crypto space in South Africa.