South Africa tightens crypto regulations to collect user data

The Financial Intelligence Centre (FIC) in South Africa has announced the implementation of Directive 9, which enforces the Financial Action Task Force's (FATF) "travel rule" for crypto asset transfers. This directive, effective from April 30, 2025, mandates that accountable institutions involved in cryptocurrency transactions share detailed information to combat money laundering and terrorist financing. Directive 9 outlines the requirements for crypto asset service providers (CASPs) to collect and retain information on the originators and beneficiaries of crypto asset transfers.

Under this directive, CASPs must provide transaction details securely to beneficiary institutions, ensuring compliance with international standards. The FIC aims to assist South Africa in being removed from the FATF's grey list, which can negatively impact the country's financial reputation and increase transaction costs. The directive requires that both parties' full names and wallet addresses be recorded, with stricter rules for transactions exceeding 5,000 Rand (approximately $277).

Cryptocurrency adoption in South Africa is rapidly evolving, with significant institutional interest and regulatory clarity driving market growth; over 5.8 million South Africans currently hold crypto assets. Recent developments include the introduction of a licensing framework for crypto service providers and the ability to purchase property using cryptocurrencies, reflecting a broader integration of digital assets into traditional financial systems.