According to the regulator of the South African financial services industry, cryptocurrency exchanges based in the country must secure operating licenses before the year ends. Crypto exchanges that fail to abide by the requirement will either be fined or closed down, Unathi Kamlana, the Financial Sector Conduct Authority commissioner, said.
The Importance of Regulation
The South African financial services regulator, Financial Sector Conduct Authority (FSCA), has said cryptocurrency exchanges operating in the country must secure operating licenses before the end of the year. According to Unathi Kamlana, the FSCA commissioner, entities that fail to abide by this requirement will either be fined or closed down.
The latest crypto-related comments by Kamlana just a few months after a fintech analyst with the South African Reserve Bank revealed that regulations governing tokenized deposits and crypto assets will become effective on Jan. 1, 2025. However, the analyst warned that regulators will still need to learn and understand the risks that come with the technology which underpins digital assets.
Meanwhile, in his remarks during an interview, Kamlana explained why the regulator has finally taken this step. He said:
There is potentially serious harm to financial customers when using crypto products, and therefore it makes sense for us to introduce the regulatory framework.
The FSCA commissioner, however, acknowledged that the effectiveness of this and related measures will only be determined after a certain period of time. According to the Bloomberg report, the FSCA has already received 20 applications and more will be received before the Nov. 30 deadline.
In addition to seeking to regulate the crypto industry, Kamlana also revealed his organization’s involvement in efforts aimed at raising the public’s awareness of crypto products. He also offered his thoughts on why the public needs crypto education.
“It is an area where you can lose quite a bit of money, so you must think twice before exposing yourself to it,” Kamlana reportedly said.
Register your email here to get a weekly update on African news sent to your inbox:
What are your thoughts on this story? Let us know what you think in the comments section below.
