Mar 14, 2024 12:25
South Africa is planning to license approximately 60cryptocurrency platforms by the end of March. According to a report byBloomberg, this initiative by the Financial Sector Conduct Authority (FSCA)underscores the nation's proactive approach towards regulating the burgeoningcrypto sector.
The FSCA revealed that the response exceededexpectations, with more than 300 crypto-asset providers seeking regulatoryapproval. The deadline for application for the licenses is set for November 30.
Utilizing Existing Regulatory Frameworks
Rather than developing a standalone regulatoryframework for crypto operators, the FSCA has opted to leverage the existingFinancial Advisory and Intermediary Services Act. The regulator aims to bolster consumer protection andaccountability within the sector by bringing crypto exchanges under the purview of thisregulation.
Notably, the new guidelines offer a recoursein case of breaches or misconduct by the crypto platforms' operators. This regulatory oversight aims to instill confidenceamong investors and mitigate potential risks associated with crypto trading.
South Africa will license about 60 cryptocurrency platforms by the end of the month, placing it among the first nations on the continent to oblige digital-asset exchanges to have permits to operate https://t.co/zRIB7femKd
Bloomberg (@business)
March 13, 2024Commissioner Unathi Kamlana acknowledged that while the regulation serves as a robust foundation for crypto oversight, ongoing supervisionmay reveal gaps that necessitate additional measures. As the FSCA continues to license and monitor cryptoplatforms, it remains open to refining regulatory frameworks to effectively addressemerging challenges.
Last year, South Africa authorized all crypto exchangesoperating within the country to register with the FSCA. Failure to comply withthis directive could lead to enforcement actions, such as fines or businessclosure. The new regulations aim to safeguard investors frompotential fraud and ensure greater accountability within the digital asset space.
South Africa Regulates Crypto
The directive from the FSCA affects majorcryptocurrency exchanges like Binance, Coinbase, Kraken, and KuCoin, all ofwhich are currently operating in the region. This movefollowed reported cases of fraud, including the infamous Africryptincident where Bitcoins worth $3.6 billion went missing due to alleged hacking.
Besides that, the FSCA's decision to tighten regulations isinfluenced by past investigations, such as the probe into Mirror Trading International (MTI), a cryptocurrency trading network operating in SouthAfrica. Previously, the US Commodities and Futures Trading Commission sued MTI for its involvement in what was dubbed "the largest fraudulent scheme involving Bitcoin."
This article was written by Jared Kirui at www.financemagnates.com.
World Crypto Global
