The Financial Sector Conduct Authority, South Africa’s financial regulator, published a notice indicating that the country’s 2002 Financial Advisory and Financial Intermediary Services Act has been updated to include a definition of crypto assets.
The FSCA notice, which went into force on publication in the Green Gazette states that a crypto asset is a digital representation of value that can be electronically traded, transferred and stored but is not issued by a central bank. Additionally, it “applies cryptographic techniques” and uses distributed ledger technology.
Under the FAIS, a financial product is defined as a security, debenture, “any money-making instrument” or an instrument conferring rights to securities and instruments. It can be offered by financial service providers, whether they are domestic or international firms, that are licensed in South Africa.
A South African draft declaration on crypto assets was published in November 2020. In June 2021, a national working group created a roadmap for a regulatory framework. Regulation will help the country conform to Anti-Money Laundering/Know Your Customer standards and protect investors, but the details of the AML/KYC requirements have aroused some controversy.
