Inspenet, July 6, 2023.
South Africa has become the first country in Africa to take the initiative to require licenses for digital asset exchanges. The aforementioned country’s financial regulator has announced that all cryptocurrency exchanges in the nation will be required to obtain licenses before the end of the year, according to a Bloomberg report.
Cryptocurrency exchanges and licenses
Unathi Kamlana, Commissioner of the Financial Sector Conduct Authority (FSCA), stated that the agency has received approximately 20 license applications since its recent opening and expects to receive more before the November 30 deadline. , as reported by Bloomberg.
Kamlana also mentioned that if these continue to operate without a license after the deadline, the regulator intends to take “coercive measures” that could include fines or the closure of non-compliant companies, according to the report.
Likewise, the report quoted Kamlana as saying that introducing a regulatory framework for crypto products is a sensible approach due to the potential risk of serious harm to financial clients. He also expressed the need for time to assess the effectiveness of the measures and ensured continued collaboration with the sector to improve and apply the necessary changes.
This new regulation will affect several major South African-based cryptocurrency exchanges, including Luno , owned by Digital Currency Group and VALR , an exchange backed by Pantera Capital. Global platforms like Binance , which operate in the country, will also need to obtain licenses.
According to a spokesperson for the FSCA, all persons providing financial services related to crypto assets, with the exception of certain activities such as cryptocurrency mining and NFT service providers, must obtain authorization. Failure to comply with this requirement constitutes a violation of the law and the competent authorities may take regulatory action accordingly.
The FSCA has been involved in regulating cryptocurrency and fintech, working in collaboration with an “Intergovernmental Task Force on Fintech” made up of South Africa’s leading financial sector regulators and policy makers, including the National Treasury and Bank of the South African Reserve.
The trend of tightening regulation is not just limited to South Africa, as on July 3, the Monetary Authority of Singapore announced that the country’s cryptocurrency service providers will be required to deposit client assets in a statutory trust before the end of year to ensure safe storage. This move highlights the global shift towards stricter regulation in the cryptocurrency sector.
Source: https://es.cointelegraph.com/news/crypto-exchange-licences-south-africa-by-year-end
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