Bloomberg has reported that by the end of 2023, crypto exchanges in South Africa will only be able to operate under licenses obtained from the local financial regulator, the Financial Sector Conduct Authority (FSCA).
According to the report, around 20 applications from exchanges have already fallen onto the table of the aforementioned regulator in order to obtain a license since the opening a few weeks ago. The deadline is at the end of November, so more applications are expected to arrive by that time.
If crypto exchanges keep operating without licenses when the deadline passes, they will see enforcement action taken against them or will be fined, FSCA Commissioner Unathi Kamlana told Bloomberg, since crypto trading services offered by platforms without a license can bring potential harm to traders and investors.
South Africa will require cryptocurrency trading platforms in the country to obtain licenses to operate by the end of this year. Officials say the FSCA has received about 20 applications since the licenses opened a few weeks ago and expects to receive more before the November 30…— Wu Blockchain (@WuBlockchain) July 4, 2023
He stated that the regulator will keep working with the crypto space in order to improve it and make changes, should that be necessary.
South Africa is the first country on the continent that intends to implement licenses for crypto exchanges to operate in order to protect users. These platforms, including global crypto giant Binance, will have to obtain a license to offer their services in this market now.
Now, governments and regulators are concerned about the work of crypto exchanges after FTX giant based in the Bahamas collapsed in early November last year. Currently, founder Sam Bankman-Fried intends to revive and relaunch it.
The European Union has recently given the green light to MiCA – the first rules for the crypto space to run in Europe.