Roughly 50 cryptocurrency firms are currently in the process of awaiting approval for their applications.
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In June 2023, FCSA asked cryptocurrency companies that wish to operate in South Africa to apply for a license from the authority within a six-month period, starting from June 1, 2023.
The South African Financial Sector Conduct Authority (FSCA) has now announced it’s plans to issue licenses to crypto asset service providers (CASPs) within the next few weeks.
Around 50 cryptocurrency companies are currently awaiting approval for their applications, as confirmed by Gerhard Van Deventer, the Head of Enforcement at FSCA, in an interview with a local South African news outlet.
Initially, 145 companies applied for the CASP license, but only 50 of them progressed to the licensing committee by December 2023. About 20 companies withdrew their applications during the process, citing the high cost of licensing and the shortage of experts, according to Van Deventer.
Many observers within the cryptocurrency space interpret this move as a positive indication of South Africa embracing blockchain technology.
Van Deventer emphasized that under the new licensing system, consumers should exclusively engage with licensed crypto firms, viewing the absence of a license as a warning sign. Additionally, consumers should scrutinize the specific licenses held by crypto firms when assessing their legitimacy.
He acknowledged that although the licensing system provides regulators with more control over crypto scams, which have proliferated in South Africa, it won’t completely eradicate them. One notable trend is the migration of scams to social media platforms.
Consumers are advised to engage solely with licensed crypto firms, considering the absence of a license as a warning sign. It’s also crucial for consumers to review the specific licenses held by crypto firms when evaluating their legitimacy.
South Africa stands as the first country in Africa to require licenses for digital asset exchanges.