South Africa’s Crypto Showdown: Exchanges Ordered to Register or Face the Enforcements

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Crypto exchanges around the world are grappling with increasing regulatory pressure, and now it’s South Africa’s turn to make its move. The country’s financial regulator, the Financial Sector Conduct Authority (FSCA), has issued an order requiring crypto exchanges to register by the end of the year or face enforcement actions. With a deadline of November 30, crypto exchanges must apply for licences to continue operating in the country.

Companies that fail to submit licence applications by the deadline will face potential enforcement actions, including forced closures and fines for operating without a proper licence. The FSCA Commissioner, Unathi Kamlana, emphasized the importance of protecting financial customers from potential harm associated with crypto products. The regulatory framework aims to ensure accountability and effectiveness in the crypto market, with the FSCA working alongside industry players to refine and adapt regulations as needed.

Prominent crypto companies operating in South Africa, such as Binance, Luno (owned by Digital Currency Group), and VALR (backed by Pantera Capital), are among those required to secure licences before the deadline. South Africa’s history includes high-profile crypto scams that have resulted in significant losses for investors, highlighting the need for tighter regulations and oversight.

The FSCA is working in conjunction with an “inter-governmental fintech working group,” which includes the country’s financial regulators and policymakers, such as the National Treasury and the South African Reserve Bank. This collaborative effort aims to establish comprehensive crypto oversight and ensure a coordinated approach to regulating the industry.

The tightening of crypto regulations is not limited to South Africa. Countries worldwide are joining forces to reinforce rules and enhance oversight in the wake of last year’s crypto contagion that resulted in numerous collapses and bankruptcies. The European Union’s Markets in Crypto-Assets (MiCA) regulation is set to bring comprehensive regulatory frameworks to the region. Hong Kong has also implemented new regulations for licensing exchanges, ushering in a new wave of regulation in the crypto market.