Cryptoplatforms in South Africa are required to obtain a license in 2023

25th of August, 2023

The Financial Services Supervisory Authority of South Africa (FSCA) has announced that the Financial Advisory and Intermediary Services Act has been updated. Virtual assets are now considered financial products. This decision is an extremely important step in terms of regulating the cryptocurrency industry. All companies that work with digital assets must obtain a license by November 20 this year.

The FSCA has introduced a definition for cryptocurrency assets - "digital representation of value". The regulator noted that, despite the fact that cryptocurrency is now considered a financial product, it will still be impossible to use it as a legal tender. But it will be necessary to obtain a license.

The regulator's decision is important from two other points of view. First, now the control over the crypto industry will be more in line with the country's legal framework. Secondly, owners of digital assets will be able to choose more qualified consultants, as they will be licensed specialists.

Once this decision is made, regulators will be able to require market participants to comply with anti-money laundering programs. South African regulators have previously noted that such innovations are necessary, because they will allow in the future to avoid being gray-listed by the Financial Action Task Force (FATF). Such a threat existed, and inclusion in the list could happen as early as last year. FATF representatives stated that this would happen if the South African authorities did not eliminate legislative deficiencies and begin to suppress money laundering by October 2022.

The new realities will not affect NFT. Regulators view the purchase of such digital assets as an "investment in art." However, the FSCA promises that it will monitor this market segment in the future.

How to get a license

Legalization of activities in the cryptocurrency industry brings many problems even to the giants of the market, not to mention smaller companies. Sometimes regulators themselves interpret regulations differently within the same jurisdiction. Therefore, it is strongly recommended to delegate this task to professionals, otherwise the procedure may drag on for years.

You can contact Intelligent Solution Group, which provides assistance in obtaining licenses for cryptocurrency activities. Specialists take care of the whole process: from company registration to obtaining a license and opening a bank account for work. The important thing is that each case is unique. Companies can use different ways to obtain a crypto license. Intelligent Solution Group has developed templates with the help of which firms can go through this path as quickly and "painlessly" as possible.

Finally, we would like to note that every company that plans to work in the cryptocurrency segment on a serious level should set itself the goal of obtaining an official license. Otherwise, the threat of bans, blocking and penalties will always hang over the business.