Deadline Approaches for Crypto Exchanges in South Africa – BusinessTech

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South Africa will require crypto exchanges in the country to operate with licenses by the end of the year, according to the country’s financial regulator.

The Financial Sector Conduct Authority has received around 20 applications since the licenses opened a few weeks ago, with more expected before the November 30 deadline, FSCA Commissioner Unathi Kamlana said in a statement. interview.

The regulator plans to take enforcement action that could see businesses closed or fined if they continue to operate without a license past the deadline, Kamlana said.

There is potentially serious harm to financial customers when using crypto products, and so it makes sense for us to introduce the regulatory framework, Kamlana said in Pretoria.

Time will tell the effectiveness of our measures, and we will continue to work with the industry to refine and make changes where and if needed.

Africa’s most developed economy is the first on the continent to require digital asset exchanges to secure licenses. Several of the continent’s largest trading platforms have emerged from South Africa, including Luno, owned by Barry Silberts Digital Currency Group, and Pantera-backed VALR.

Other global platforms such as Binance operate in the country and will need to obtain licenses.

Regulators and policymakers around the world have tightened the rules governing the cryptocurrency industry, following a series of corporate meltdowns that culminated in the bankruptcy of the Bahamas-based exchange FTX.

In April, European lawmakers gave their final blessing to European Crypto-Asset Markets, or MiCA, a law that will give the bloc its first rules for the crypto industry, while last month Hong Kong implemented implementation of new regulations for trading licenses.

Over the past few years, South Africa has been the backdrop for many of the biggest crypto scams in the world that have caused billions of dollars worth of investments to disappear. This includes the disappearance of 70,000 Bitcoins in 2021 from a platform called Africrypt which was run by the Cajee brothers and the multi-level marketing fraud scheme Mirror Trading International Proprietary.

The FSCA has been active on crypto and fintech regulations, working with an intergovernmental fintech task force, which includes the country’s top financial sector regulators and policymakers, such as the National Treasury and the Reserve Bank of the South. -African.

Part of the measures to protect consumers includes financial education and public awareness of cryptocurrency products, Kamlana said.

This is an area where you can lose quite a bit of money, so you need to think twice before exposing yourself to it, he added.

Read: Reserve Bank talks digital rand and crypto in South Africa

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