South Africa will be one of the first countries on the continent to require digital asset exchanges to obtain a license to operate.
The Zhitong Finance App learned that South Africa will issue licenses to around 60 cryptocurrency platforms by the end of this month, making South Africa one of the first countries on the continent to require digital asset exchanges to obtain operating licenses.
The Financial Sector Conduct Authority (Financial Sector Conduct Authority) requires exchanges to apply for permission before November 30, otherwise they may face enforcement action. The bureau said there are currently more than 300 exchanges seeking approval.
Financial Industry Conduct Authority Commissioner Unathi Kamlana (Unathi Kamlana) said in an interview, “We are processing these license applications, and considering the number of applications, they are currently being processed in stages.”
It is reported that regulators will not establish a separate framework for cryptocurrency exchanges, but will monitor these companies in accordance with the existing “Financial Advisory and Intermediary Services Act”. The law will focus on the honesty, integrity, ability and qualifications of financial service providers in accordance with the “appropriateness” requirements.
Kamrana said, “If you keep waiting for the best regulatory framework, then you will still face these risks no matter what.”
Recently, Bitcoin Spot's record-breaking inflow of funds from the US Exchange Traded Fund (ETF) boosted Bitcoin's fiery rise, driving the world's largest cryptocurrency to a record high of $73,664. Other cryptocurrencies are also rising due to renewed interest in this asset class. The price of Ether rose by 3.3% on Wednesday, and has risen by about 75% since this year.
As cryptocurrency exchanges fall under the jurisdiction of the Financial Advisory and Intermediary Services Act, investors will also enjoy recourse rights and protections not currently obtained. If the operator violates any requirements of the Act, regulators will be able to take enforcement measures.
“In the process of licensing and regulation, we may find gaps that the existing regulatory framework (i.e. the Financial Advisory and Intermediary Services Act) cannot fill.” Kamrana said, “When we find these gaps, we may need to further improve on this.”
Notably, several of the continent's largest exchanges are from South Africa, including LUNO under Barry Silbert's Digital Currency Group and VALR, which is supported by Pantera. Other global platforms such as Binance (COIN.US) also operate in South Africa.
Additionally, the pan-African cryptocurrency exchange Yellow Card Financial was the first company on the African continent to obtain a license, and the Republic of Botswana granted it a license in 2022.