The Financial Sector Conduct Authority (FSCA) of South Africa is currently investigating 30 crypto-related companies for operating without authorization. This action highlights development coincides with the evolving crypto regulatory framework in the country. Earlier this month, the FSCA issued an additional 63 licenses to compliant firms, increasing the total number of registered crypto and related service providers in South Africa 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.

warning to unregistered players

Mariblock reports that the FSCA has committed to releasing the results of its investigations, simultaneously issuing a cautionary message to unlicensed operators within the sector. This crackdown forms a crucial component of South Africa’s strategy to combat the risks associated with terrorist financing. Furthermore, it aligns with global efforts, specifically addressing concerns raised by the Financial Action Task Force (FATF) regarding the widespread use of cryptocurrencies for money laundering purposes.

Costa Rican authorities recently arrested 36 individuals linked to a criminal gang that used cryptocurrency for money laundering. The gang’s activities involved illicit financial transactions, prompting their apprehension by law enforcement. In another context, 57% of the countries listed on the FATF’s grey list are African nations. These include South Africa, Namibia, Nigeria, Mozambique, Kenya, Tanzania, Burkina Faso, Cameroon, the Democratic Republic of Congo, Mali, Senegal, and South Sudan, comprising a total of 12 countries from Africa in the report.

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