South Africa's Financial Authority approves 248 crypto asset service provider licenses

The Financial Sector Conduct Authority (FSCA) of South Africa has released an update on its licensing process for Crypto Asset Service Providers (CASPs), which began on June 1, 2023, under the Financial Advisory and Intermediary Services (FAIS) Act, No. 37 of 2002.

To date, the FSCA has received 420 CASP licence applications. Of these:

• 248 applications have been approved
• Nine applications have been declined
• 106 applications were voluntarily withdrawn after discussions regarding the suitability of the applicants’ business models
• 56 applications remain under review

The FSCA cited the following key reasons for rejecting CASP applications:

1. Operational Ability Requirements: Applicants failed to provide comprehensive business plans and operational frameworks supporting their crypto asset activities.
2. Competency Requirements: Applicants lacked the requisite knowledge and practical experience related to crypto assets.

Applicants who withdrew or were declined are permitted to reapply, provided they meet all licensing criteria. However, until authorisation is granted, they are prohibited from engaging in CASP-related activities. Any unauthorised activity will result in regulatory action. This restriction does not apply to applicants who submitted by the November 30, 2023, deadline and are awaiting the finalisation of their applications.

The FSCA defines crypto assets as:

• Digital representations of value not issued by a central bank but tradable electronically for payments, investments, or utility.
• Applying cryptographic techniques and using distributed ledger technology.

The public can access the full list of licensed CASPs and the extended exemption notice on the FSCA’s official website.