The South Africa Financial Sector Conduct Authority (FSCA) has approved 248 crypto asset service provider licences out of the 420 applications received, the regulatory body has said.
So far, only nine applications have been rejected, while 106 were voluntarily withdrawn after discussions with the regulator about the suitability of their business and operating models.
One of the main reasons for rejecting CASP license applications has been the failure to meet the ‘fit and proper‘ criteria outlined in the Financial Advisory and Intermediary Services (FAIS) Act.
The FSCA identified two key areas where applicants failed to meet requirements:
The first was operational ability, where applicants did not provide detailed and comprehensive business plans or descriptions of their business models. These plans must clearly outline crypto asset activities and the key operational frameworks supporting them.
The second area was competency, as many applicants lacked or were unable to demonstrate the necessary knowledge and practical experience related to crypto assets.
“Institutions that have voluntarily withdrawn their applications or that have had their applications declined by the FSCA are free to re-apply in future, on condition that they demonstrate full and proper compliance with the applicable licensing requirements,” the regulator stated.
“In the meantime, they may not undertake any CASP-related activities as defined under the FAIS Act.”
FSCA cautioned that any institution or individual engaging in CASP-related activities without proper authorization will face regulatory action.
“This does not apply to institutions or persons that submitted their licence applications by 30 November 2023 and are still awaiting the finalisation of their applications by the FSCA,” it stated.
REGULATION | South African Regulator, FSCA, Pursuing 30 Crypto Firms Operating Without Licenses
According to current crypto regulations, entities that continue operations without applying for registration could face a fine of up to R10 million or even a criminal conviction… pic.twitter.com/ducTAf16Ev
— BitKE (@BitcoinKE) July 8, 2024
The FSCA has extended the deadline for CASPs and their key individuals to meet regulatory examination requirements from November 11 2024, to June 30 2025.
“Failure to comply with this requirement may lead to regulatory action, including suspension or withdrawal of authorisation,” the FSCA warned.
FSCA classified crypto assets as financial products requiring regulatory oversight in 2022, being the first African country to do so. According to the authority, this aims to protect consumers from the inherent risks associated with the crypto market, such as fraud and money laundering.
South Africa’s Financial Regulator, FSCA, Declares Crypto Assets as a Financial Product
A crypto asset is used as an investment vehicle… and it resembles a financial product – you invest in it, you get returns from it.” – FSCAhttps://t.co/FOAe4pMmy3
— BitKE (@BitcoinKE) October 21, 2022
The FSCA said it is still considering 56 applications.
See the full list of licensed CASPs by FSCA via this link as of this writing.
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