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- 1 Crypto exchanges in South Africa would need to get licenses prior to the year’s end.
- 2 Singapore and South Korea also took measures towards crypto regulations recently.
Growing concerns around cryptocurrency operations and providing safeguards to crypto investors make regulators think crypto regulates the burgeoning asset class industry. The trend has been picking up pace across developed and developing countries. South Africa is reported to push regulations as it is making it mandatory for crypto exchanges to receive a license.
Bloomberg reported the Financial Sector Conduct Authority (FSCA) stated that the crypto exchanges operating in the region would need to get licensed by the year’s end. The deadline for crypto firms to receive the licenses is November 30, 2023.
South African financial regulator commission, Unathi Kamlana, said they have received 20 applications for licenses until now, after about several weeks since the opening for it. However, she had expected more to come before the deadline.
In case the exchanges fail to get the license and continue to operate in the region without it, the regulator would take action. The “enforcement actions” could lead to fines or even shutting down of the company’s operations post deadline.
FSCA commissioner asserted the need of strict regulatory actions without which, the “financial customers” using cryptocurrencies are prone to witness “potentially serious harm.”
“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,” she added.
South Africa Leading in African Region
South Africa is among the countries across the African continent requiring crypto service providers for license. Many prominent crypto firms have seen their emergence from the country, including the biggest ones in Africa.
The Digital Currency Group’s cryptocurrency company Luno and crypto hedge fund Patera backed digital asset platform VALR operate in South Africa. Additionally, some other major cryptocurrency exchanges also have their operations in the country and would need to apply for licenses.
History of one of the biggest crypto scams in the country acts as the background for ramping up the efforts for implementing crypto regulations in South Africa. Instances like Cajee brother operated Africrypt running with 70K Bitcoin (BTC) in 2021 and fraudulent pyramid scheme Mirror Trading International Proprietary made billions of dollars worth assets completely gone.
Such instances have made the regulatory authorities in the region to go stringent with the regulations. The bank has been working with the National Treasury and the South African Reserve Bank like financial regulators and policymakers of the country.
Recently, Asian countries like Singapore, South Korea, and Hong Kong were also reported to introduce crypto regulations or take several measures towards regulations of burgeoning asset classes and related companies in the respective regions. While the two have the motive of safeguarding crypto users and crypto exchanges to comply with several obligations, Hong Kong looks for more crypto-friendly regulations in the hope of its aspiration to become a crypto hub.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
