South African Financial Regulator Starts Issuing Crypto Licenses
South African Financial Sector Conduct Authority (FSCA), cryptocurrency license The issuance declared significant progress in regulating digital assets in the country.
This move is in line with the process of integrating cryptocurrency into regular financial activities to increase consumer protection and combat financial crimes such as money laundering and terrorist financing. As a result, luno, a crypto exchange, and Zignaly, a decentralized social investment marketplace, are among the first recipients of these licenses.
Luno Bags First License
FSCA to Luno, a crypto asset service provider South Africa, the first license to operate as a financial services provider. Introduced in 2013, Luno continues to be a very strong player in the cryptocurrency market while respecting regulations, security and safety.
The license is granted under the Financial Advisory and Brokerage Services Act 2002, which regulates the provision of certain financial advice and brokerage services in South Africa. This license will allow Luno to offer more to financial institutions and introduce new features and products.
Zignaly’s Licensing Move
Simultaneously, Zignaly is participating in the first licensing phase together with Luno. The company has been awarded a Category 2 – Discretionary Financial Services Provider (FSP) licence. With this approval, Zignaly is authorized to manage investments on behalf of investors and act as a custodian of funds for its clients.
The license is equivalent to that held by traditional financial giants; This shows how seriously South African regulators take the crypto industry.
Zignaly’s approval allows the company to comply with new rules that may be related to decentralized finance (DeFi). This forward-looking gesture follows Zignaly’s landmark $50 million financing deal with the Luxembourg fund in 2022.
Regulation and Compliance in the Crypto Space
Licensing of crypto companies began in June 2023, when legislation was adopted and cryptocurrencies became part of regulated financial activities. FSCAs The approach is to protect consumers and preserve the integrity of the financial system. Approximately 60 crypto platforms will be licensed in the short term.
Additionally, the regulator emphasized the importance of complying with the heavy penalties imposed on companies operating without the necessary approvals. This company’s stand reflects the regulator’s commitment to a regulated and secure crypto environment.
Consequently, the licensing of these entities would be a milestone for the South African financial market. It reflects the country’s acceptance of digital products and its efforts to create a safe and orderly environment. cryptocurrency exchanges. This action is expected to attract more participants to the crypto industry, spur innovation, and possibly drive greater financial inclusion.
For users, controlling crypto assets provides greater protection and a secure environment to trade and invest in digital currencies. It also opens the door for traditional financial institutions to interact with crypto assets, which can result in more compatible and diverse financial services.
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Kelvin is a distinguished author specializing in crypto and finance, with a bachelor’s degree in Actuarial Science. Known for her sharp analysis and insightful content, she is fluent in English and specializes in comprehensive research and on-time delivery.
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. Neither the author nor the publication accepts any liability for your personal financial loss.
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