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South Africa’s financial regulator has ordered crypto exchanges in the country to apply for licenses before the end of the year to continue operating.
Bloomberg reports South Africa’s Financial Sector Conduct Authority (FSCA) said cryptocurrency exchanges operating within the country must apply for licenses before year end to continue their operations.
FSCA Commissioner Unathi Kamlana said in an interview that the authority received about 20 applications since opening licenses a few weeks ago and expects more to be submitted before the deadline on November 20.
Kamlana said the FSCA plans to take “enforcement action” against exchanges that continue to operate without a license after the deadline, adding that firms could be closed down or fined. The Commissioner said:
There is potentially serious harm to financial customers when using crypto products, and therefore it makes sense for us to introduce the regulatory framework.
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.
Exchanges which operate in South Africa include Binance, the Digital Currency Group-owned Luno, and the Pantera Capital-backed VALR. All these exchanges need to secure licenses if they wish to continue their operations.
Regulators Step Up Crypto Oversight
South Africa’s tightened crypto oversight comes after a string of bankruptcies in 2022 caused the market to spiral. The collapse of FTX was the catalyst which heightened scrutiny of crypto firms and exchanges.
EU regulators formally signed its landmark Markets in Crypto Assets (MiCA) into law on May 31, with measures set to take force in 2024. European legislators also formally enacted another law on anti-money laundering, which mandates crypto providers to authenticate their customers’ identities when conducting wire transfers.
The UK also voted to pass into law its Financial Services and Markets bill, which will see the country on its way to dealing with crypto as a “regulated activity.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.