South Africa Grants Crypto Licenses to 75 Institutions
South Africa’s Financial Sector Conduct Authority (FSCA) has officially confirmed that it has issued cryptocurrency licenses to a total of 75 institutions. This announcement comes after various crypto companies had previously claimed to be the sole recipients of such licenses. The FSCA grants these licenses to crypto asset service providers (CASPs) in accordance with the Financial Advisory and Intermediary Services (FAIS) Act.
- The FSCA has granted licenses to 75 institutions in total.
- Crypto licenses are issued to CASPs under the FAIS Act.
- Businesses must adhere to regulations to qualify for a license.
Regulation of Crypto Services in South Africa
The FSCA’s licensing authority is constrained to the regulation and oversight of CASPs that provide financial services related to crypto assets as defined by the FAIS Act. These services may encompass advisory, intermediary, and investment management services, but they do not entail the recognition of crypto assets as legal tender by the South African Reserve Bank.
- FSCA’s jurisdiction is limited to CASPs providing financial services.
- Services include advisory, intermediary, and investment services.
- Crypto assets are not recognized as legal tender in South Africa.
Entities Granted Crypto Licenses
Among the entities that have received crypto licenses in South Africa are well-known platforms such as Luno, Altcoin Trader, and VALR. Despite a significant number of applications received by the FSCA from potential CASPs, only 75 have been approved after a rigorous two-year evaluation process. The FSCA has asserted its commitment to updating the public regularly on the status of pending applications.
- Luno, Altcoin Trader, and VALR are among the license holders.
- Over 374 applications were submitted for crypto licenses.
- The FSCA will provide ongoing updates on approved applications.
Binance Excluded from FSCA’s Crypto License List
Despite being one of the largest crypto exchanges globally, Binance did not secure a spot on the list of licensed entities in South Africa. The exchange had set up operations in the country in July 2022 but subsequently decided to discontinue certain services to comply with regulatory requirements. This move came following cautionary advice from the FSCA regarding the risks associated with engaging with the “Binance Group.”
- Binance did not receive a license from the FSCA.
- The exchange terminated some services in South Africa.
- Regulators issued warnings about engaging with Binance.
Regulatory Environment in South Africa
According to the FSCA, Binance is not permitted to offer any financial services or conduct business activities in South Africa, as the country currently lacks regulations governing crypto-related investments. Furthermore, the South African Revenue Service (SARS) has introduced new tax regulations on cryptocurrencies, imposing taxes of up to 45% on certain transactions.
- Binance is unauthorized to provide financial services in South Africa.
- South Africa has yet to establish regulations for crypto investments.
- SARS has implemented new taxes on cryptocurrency transactions.
Hot Take: South Africa’s Evolving Crypto Landscape
As South Africa’s regulatory framework for cryptocurrencies continues to evolve, the recent issuance of licenses to 75 institutions marks a significant milestone in the country’s crypto sector. While established platforms like Luno and VALR have obtained licenses, the absence of Binance from the list underscores the stringent regulatory environment that crypto businesses must navigate in South Africa.
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