The national financial regulator has brought crypto assets under its umbrella, clarifying an ar…
The national financial regulator has brought crypto assets under its umbrella, clarifying a hitherto gray area under South African law.
South Africa Financial Sector Conduct Authority (FSCA) stated that crypto-assets are a financial product. As of October 19, this means that crypto assets are now subject to FSCA regulation, under Section 1(h) of the Financial Advisory and Intermediary Services Act (FAIS).
The designation requires anyone who provides advice or intermediary services related to crypto assets to be licensed as a financial services provider or as a representative of such a provider, with a deadline of November 30, 2023 to apply. such license.
The FAIS Act gives meaning to crypto assets as a negotiable unit of digital value not issued by a central bank that uses crypto and distributed ledger technologies.
The statement is the result of a proposal by the FSCA and a draft law published on November 20, 2020 to place providers of financial services related to crypto-assets under the mandate of the regulator, and a subsequent public consultation which gathered 94 individual comments from 22 stakeholders.
Prior to the statement, South Africa was at heightened risk of reputational damage following the Paris-based intergovernmental organization Financial Action Task Force (FATF) in October last year, which cited the country’s non-existent regulation on crypto-assets as a key shortcoming in the context of combating money laundering and terrorist financing.
An FSCA policy document was released alongside the statement which contains explanatory notes, transitional details and plans for a regulatory and licensing framework for crypto-assets.
The regulator has also released a draft blanket exemption at the same time, inviting comments before early December, which will help existing players in the crypto-asset industry transition to the new regime, allowing those people to provide services. financial institutions without a license between June and November of the following year inclusive, provided that the application for such a license is submitted during the same period.
The proposed exemption also spares a number of so-called “ecosystem participants” from the mandate of the FAIS Act, including crypto-asset miners and node operators engaged in the operation and maintenance of cryptocurrencies. crypto asset networks, as well as those dealing with non-fungible assets. tokens.
End of April Central African Republic announced the high-level cryptocurrency Bitcoin as the official currencythe first African country and the second in the world to do so.