Taking the number of crypto asset service provider licences that have been issued to 248.
The Financial Sector Conduct Authority (FSCA) has issued a batch of new crypto asset service provider (Casp) licences in recent months, bringing the total number of licences issued to 248.
One of the key reasons for introducing the Casp licensing regime was to eliminate scams such as Mirror Trading International (MTI), which lured bitcoin holders with bogus promises of earning 10% returns a month.Â
Another reason is to remove SA from the Financial Action Task Force grey list.
The FSCA’s issue of new licences comes as bitcoin crashed through the key $100 000 barrier, to trade at $104 000 (R1.86 million) on Monday.
The FSCA started the Casp licensing process in June 2023 and, by April 2024, had issued a total of 75 licences.
That figure has now more than trebled, suggesting growing recognition of crypto’s role in the future of finance.
The FSCA says it has received a total of 420 Casp licence applications, of which 248 have been approved, and nine declined.
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New crypto exchangeÂ
One of the new licensees is Afridax, SA’s newest crypto exchange, founded by Frank Leonette.
It offers crypto wallet services designed to simplify crypto operations for everyday use. For more advanced crypto users, it has a trade engine with wallet and trading functions accessible via API (application programming interface).
Afridax is launching with an offering of 10 crypto assets, which it plans to expand in the first quarter of 2025. The exchange will also offer staking and earning opportunities and the ZARP rand-backed stablecoin.
“We are here to build trust, drive adoption, and unlock the potential of cryptocurrency for individuals and businesses across the country,” says Leonette.
ALSO READ: South Africa now has over 100 licensed crypto asset service providers
Some applicants bow out
The FSCA says that while 428 applications were received, 106 were voluntarily withdrawn by applicants after engaging with the FSCA “on the appropriateness of their respective business and operating models”.
A further 56 applications are still in the process of being considered.
The reasons given for the decline in applications include applicants’ inability to meet the fit and proper requirements of the Financial Advisory and Intermediary Services (Fais) Act.
The two areas of concern were the ability of applicants to provide clear and comprehensive business plans and business model descriptions outlining crypto asset activities, and insufficient demonstration of competency in terms of knowledge and practical experience relating to crypto assets.
The FSCA says those institutions that voluntarily withdrew their applications or were declined are free to reapply in the future, provided they demonstrate full and proper compliance with the applicable licensing requirements.
ALSO READ: Sars’ spotlight on crypto traders signals new era of accountability, say experts
The regulator has also extended exemptions for Casps and their key individuals from having to pass regulatory examination requirements until 30 June 2025. The previous exemption expired on 11 November 2024.
The FSCA licensing powers are limited to the authorisation and supervision of Casps for the provision of financial services related to crypto assets as defined under the Fais Act. This narrows its regulatory scope to the giving of advice, intermediary and investment management services.
This authorisation does not include the recognition of crypto assets as a legal form of tender or “cryptocurrency”. The South African Reserve Bank does not currently recognise crypto assets as currency.
This article was republished from Moneyweb. Read the original here.
