South Africa’s financial regulator has announced that all crypto exchanges in the country will be required to obtain licenses by the end of the year, according to a report by Bloomberg.
Financial Sector Conduct Authority (FSCA) Commissioner Unathi Kamlana stated that the FSCA has received approximately 20 license applications since its recent opening, and expects more before the November 30 deadline, Bloomberg reported.
Kamlana further mentioned that if crypto exchanges continue to operate without a license after the deadline, the regulator intends to take “enforcement action,” which may involve fines or closure of the non-compliant firms, according to the report.
The report quoted Kamlana as saying that introducing a regulatory framework for crypto products is a sensible approach due to the potential risk of serious harm to financial customers. According to Bloomberg, he expressed the need for time to determine the effectiveness of their measures and assured ongoing collaboration with the industry to refine and implement necessary changes.
This initiative means South Africa becomes the first country on the continent to require that digital asset exchanges secure licenses as crypto regulators and policymakers around the world continue to tighten the regulation belt around cryptocurrency.
The move affects several major trading venues that originated from South Africa, including Luno, owned by Digital Currency Group and Pantera-backed VALR. Global platforms such as Binance that operate in the country will also need to secure licenses.
The FSCA has been involved in crypto and fintech regulations, collaborating with an “inter-governmental fintech working group” consisting of major financial sector regulators and policymakers, including the National Treasury and the South African Reserve Bank.
The trend of intensifying regulations is not confined to South Africa alone. On July 3, the Monetary Authority of Singapore (MAS) announced that crypto service providers in Singapore are required to place customer assets into a statutory trust by the end of the year for secure storage. This action underscores a global shift towards more stringent regulation in the cryptocurrency sector.
Cointelegraph has reached out to the FSCA for more information on this development and is yet to receive feedback at the time of publication.