A recent news report revealed that the South African government had ordered every cryptocurrency exchange within its territory to get its operation license before the end of 2023. Failure to do so would attract severe penalties, as per the report.
According to the report, the Financial Sector Conduct Authority, which oversees financial affairs in South Africa, recently issued a regulation warning to crypto platforms in the country.
The warning statement revealed that each firm that offers crypto trading services in South Africa must obtain its license before the deadline, which was slated for November 30 of this year by the regulator.
Furthermore, by imposing the license acquisition, the financial regulators aimed to reduce the financial risks that trading crypto assets can expose investors in the country to, according to the report.
In addition, the report showed that after the announcement of the new development, South Africa, which is the most advanced financial economy in the continent, has become the first country in the whole of Africa to impose such a licensing mandate.
More so, the decision of the country showcases its utmost commitment to keeping up-to-date with the rapidly-evolving crypto technology and, at the same time, ensuring to create a progressive regulatory framework that protects consumers from the risky crypto market.
All Crypto Exchange Should Get Its License
According to the report, the Financial Sector Conduct Authority of South Africa (FSCA) had recently started receiving license applications from crypto firms. According to Unathi Kamlana, an FSCA commissioner, about 20 applications have been submitted to the agency by crypto exchanges at the time of publication.
Furthermore, the authority has given the crypto exchange till November 30 to apply for a license. Any exchange that refuses to adhere and contain yes to operate without a license after the deadline may be severely punished with total closure of fines.
In addition, Kamlana stated that the crypto space exposes investors to some financial risks which can be seriously harmful if not properly managed. Hence, he claimed that this warrants the creation of a regulatory framework to tame the fast-growing industry.
The commissioner continued that over time, they would analyze how effective the measure would be. He also pointed out that the regulation would be subjected to more modification and enhanced through thorough review from both the authorities and crypto experts.
Additionally, Kamlana revealed that the rule would apply to many popular crypto exchanges like Luno and VALR. Not only that, foreign firms such as Binance would also have to comply with the licensing rule to continue their operations in the region.
South Africa Aims To Protect And Educate Citizens
According to the report, the recent regulation by the Financial Sector Conduct Authority is part of a broader consumer protection mandate of the country. Reports showed that the regulator is working on creating financial education and public enlightenment on the use case and risks of crypto assets
Furthermore, the commissioner emphasized the efficacy of prudent investment. He warned that the crypto market is highly volatile and can cause investors to lose their funds without proper and cautious portfolio management. Hence, investors should think thoroughly before venturing into it.
In addition, the FSCA continues to actively play its role in shaping and overseeing the regulations of the crypto industry and other financial technologies in the country. More so, the agency is reportedly a member of the intergovernmental financial tech working team, which aims to provide a regulated and secure virtual economy in the region.
Meanwhile, the crypto industry continues to receive worldwide recognition and adoption, especially in some African countries like South Africa. Despite the presence of stringent regulations, the crypto market in the region continues to show a bullish trend.
According to the 24-hour price chart, the crypto market has been trending upward. Generally, the crypto market rose by 1% in the past day, amounting to a total evaluation of $1.26 trillion.