South Africa Mandates Crypto Exchange Licensing by End of 2023

Sahana Kiran
Source – Unsplash

The crypto industry has experienced remarkable growth, accompanied by surging demand. Governments worldwide have responded cautiously to this development, and South Africa has recently joined the ranks. According to the country’s financial regulator, South Africa will enforce a requirement for crypto exchanges operating within its borders to obtain licenses by the end of this year.

In May, the Financial Sector Conduct Authority [FSCA] made an announcement stating that cryptocurrency firms intending to operate in South Africa must apply for a license within a six-month period, commencing on June 1. Subsequently, a total of 20 applications were submitted to the FSCA in accordance with this requirement. FSCA Commissioner Unathi Kamlana commented on the same and 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.”

Also Read: Belarus Eyes Ban on P2P Crypto Transactions to Tackle Fraud

Here’s what will happen if crypto firms fail to register

According to the announcement, crypto companies that fail to apply for registration and continue operating after the Nov. 30, 2023 deadline could be subjected to penalties. These penalties may include a fine of 10 million South African rand which is equivalent to $510,000. An imprisonment for up to 10 years, or a combination of both.

Recent data revealed that 10% of the South African population owns crypto. Considering the magnitude of the scams and ownership in the region, the latest news is pertinent for the country.

Kamlana further added,

“It is an area where you can lose quite a bit of money so you must think twice before exposing yourself to it.”

Also Read: Blockchain Australia CEO: You Can’t Call Everything in Crypto as a ‘Scam’