South Africa’s Financial Sector Conduct Authority (FSCA) is set to decide the fate of 50 prospective cryptocurrency companies in the coming weeks, according to an official from the regulatory body. Out of over 90 initial applicants, 20 have withdrawn their applications, leaving 50 to be reviewed by the FSCA’s licensing committee in December.
In June 2023, South Africa became the first African country to mandate licensing for crypto exchanges, with the FSCA announcing that all crypto exchanges in the country must obtain licenses by the end of 2023. As of the November 30, 2023 deadline, a total of 145 applications were received, and the fate of the first batch of 50 applications is expected to be revealed in the upcoming weeks.
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South Africa’s FSCA Head of Enforcement Explains
Gerhard van Deventer, the head of enforcement at the FSCA, explained that some of the withdrawn applications were from businesses not primarily focused on cryptocurrency, but rather exploring the opportunity to expand their services. Additionally, certain applicants faced challenges meeting the requirement for an appropriate key individual (KI) with specific experience, qualifications, and skills related to cryptocurrency.
Van Deventer emphasized that all entities, regardless of the outcome of their application, are permitted to continue offering financial services until they are informed of the decision. However, those who failed to submit a license application by the deadline are prohibited from operating, as they would be considered engaging in unregistered business.
Conclusion
The regulatory developments in South Africa reflect the country’s commitment to addressing cryptocurrency-related activities. In November, South Africa joined a group of 47 other nations pledging to adopt a taxation standard to pursue individuals and businesses failing to report earnings and pay taxes on cryptocurrencies, NFTs, and other digital assets by 2027.
These regulatory efforts suggest that South Africa aims to position itself ahead of its African counterparts, such as Nigeria and Kenya, in effectively regulating, managing, and leveraging blockchain technology for national development.
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