Cryptocurrency companies interested in doing business in South Africa will need to apply for a license from the country’s Financial Sector Conduct Authority (FSCA) in the six months starting June 1.
While South African crypto companies have welcomed the new licensing regime, they worry the fine waiting for those that fail to register in time may sink smaller companies or drive away firms that want to enter the market after the deadline has passed.
“The licensing requirements that will flow from the FSCA’s classification will drive up standards, protect consumers, and give businesses the certainty to invest, innovate and create jobs,” Taylor added.
The regime is being set up to protect consumers and that is really important, Mpumelelo Ndamane, CEO of South Africa-based crypto wallet provider Nuud Money, said.
Instead of enforcing the requirement immediately following the declaration,
South African regulators set the start date for seeking approval on June 1.
Firms that apply for registration in the designated six months will be allowed to continue operating while regulators make a decision on approval. To continue operating, firms will have to show they comply with the country’s norms for financial service providers, including conditions that firms should operate with integrity, be diligent and provide the FSCA with information they request.
However, crypto derivatives services providers do not qualify for the exemption, which allows companies to keep operating while applications are being processed, the declaration said.
Also Read: Bitcoin Payment Platform, Bottlepay Shuts Down Services, Ask Users To Withdraw Funds.
It’s not yet clear exactly how much crypto companies have to pay to register with the FSCA but the application fees that companies usually pay the regulator usually range from 2,544 South African rand ($132) to 46,251 ($2,395), depending on the category firms fall under.
Crypto companies will likely fall under category one, which has the lowest fee, and is for firms that don’t fit into any of the other categories. But if applicants fall under multiple categories, they may have to do several applications, Meiran Shtibel, associate general counsel at crypto custody platform Fireblocks said.
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