Discover the latest updates from the FSCA regarding the licensing of crypto asset service providers in South Africa, including application statistics and regulatory changes. Picture: Traxer, Unsplash.
The Financial Sector Conduct Authority (FSCA) has announced that it commenced the licensing process for crypto asset service providers (CASPs) under the Financial Advisory and Intermediary Services (FAIS) Act, No. 37 of 2002 on 1 June 2023.
According to the FSCA, as of December 10, 2024, it received 420 applications for CASP licenses; of these:
The FSCA cited several reasons for declining CASP license applications, primarily due to failures to meet the FAIS Act’s “fit and proper” requirements. These include:
The regulator said institutions whose applications were declined or voluntarily withdrawn may reapply in the future, provided they meet all licensing requirements.
Until then, it said, they are prohibited from engaging in CASP-related activities as defined under the FAIS Act. Institutions or individuals conducting such activities without authorisation will face regulatory action. However, this restriction does not apply to entities that submitted applications by the November 30, 2023, deadline and are still awaiting a decision, it said.
The FSCA said it had extended the exemption period for licensed CASPs and their key individuals from compliance with certain regulatory examination requirements (REs). Initially set to expire on November 11, 2024, the exemption has been extended to June 30, 2025. CASPs must pass the prescribed REs by this deadline or risk regulatory penalties, including suspension or withdrawal of authorisation.
Under the FAIS Act, crypto assets are defined as digital representations of value that:
The FSCA emphasised that its role was limited to the licensing and supervision of CASPs providing financial services related to crypto assets, such as advice, intermediary services, and investment management. This licensing does not equate to the recognition of crypto assets as legal tender. The South African Reserve Bank does not currently classify crypto assets as currency, it said.
For further details, including access to the extended exemption notice, visit the FSCA website.
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