South Africa’s Financial Sector Conduct Authority (FSCA) is investigating 30 crypto-related companies for unauthorized operations. The development comes as the country’s crypto regulatory landscape is beginning to take shape.
Also read: FINNOVEX South Africa 2024: empowering the financial renaissance
Earlier this month, the FSCA issued 63 more licenses to compliant firms, bringing the total number of registered crypto and related service providers in the country to 138.
South Africa began issuing licenses in Q1 2024
The regulator issued the first set of licenses to operators during the first quarter of this year. The first licensees under the regulatory requirements included the exchanges, Luno and Varl.
In October 2022, South Africa’s FSCA declared that crypto assets are now recognized as financial assets and should be regulated. The declaration made it mandatory for crypto exchanges and other related services to apply for a Financial Service Provider license. The FSCA gave operators a grace period of up to November 30, 2023, to regularize their operations or face legal action.
The FSCA revealed the investigation of the 30 operations in their latest regulatory actions. Citing the FSCA report, “In the interest of protecting the public and in support of fairness in the industry, the FSCA will act decisively against unlawful [crypto asset service providers] CASPs. There are currently 30 cases under investigation.”
Probe serves as warning shots to unregistered players
According to mariblock, the FSCA has promised to publicize the findings of the investigations while this also serves as a warning to unauthorized operators in the sector. The crackdown is part of South Africa’s efforts to tackle terrorist financing risks. It is also in line with efforts to address the Financial Action Task Force’s (FATF) concerns about money laundering through cryptocurrencies, which has become rampant across the world.
Recently, authorities in Costa Rica arrested 36 individuals connected to a criminal gang involved in money laundering through cryptocurrency.
About 57% of the FATF’s grey-listed countries are African, including South Africa, Namibia, Nigeria, Mozambique, Kenya, and Tanzania. Burkina Faso, Cameroon, the Democratic Republic of Congo, Mali, Senegal, and South Sudan make up the 12 African countries in the report.
Cryptopolitan reporting by Enacy Mapakame
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