The FSCA has responded to claims of exclusivity in the crypto asset service provider (CASP) sector by releasing a list of currently licensed CASPs.
Earlier this week, the Authority said it has noted statements in the media by certain institutions indicating they were the first or only institutions currently licensed as CASPs in terms of the FAIS Act.
“For completeness, the FSCA wishes to clarify and confirm that it has, to date, approved a total of 75 institutions to be licensed as CASPs,” the FSCA stated.
Businesses providing crypto asset financial services had until 30 November last year to submit their licence applications. Unlicensed entities were required to submit a comprehensive licence application, while licensed FSPs had to seek approval to include crypto assets in their existing licences.
After the November deadline, entities that did not submit a licence application and continued to offer crypto financial services are deemed to be engaging in unauthorised or unregistered business. This could have legal consequences, including fines or imprisonment, or both, according to the FSCA.
Entities that did submit their licence applications by the deadline are allowed to continue operating until the application process concludes and the licence is either approved or declined by the FSCA.
According to the Authority, it continues to receive and consider applications from new and existing CASPs. To date, 374 licence applications have been received.
“The FSCA will continue to provide regular updates as these applications are processed and approved,” the Authority stated.
Regulatory oversight
In October 2022, the FSCA officially declared crypto assets as financial products, mandating registration for those providing financial services related to crypto assets. This establishes a regulatory regime with oversight and supervision by the FSCA.
Crypto assets are defined as a digital representation of value that:
- is not issued by a central bank but is capable of being traded, transferred or stored electronically by natural and legal persons for the purpose of payment, investment and other forms of utility;
- applies cryptographic techniques; and
- uses distributed ledger technology.
The FSCA’s licensing powers, however, are limited to the authorisation and supervision of CASPs only insofar as they render financial services related to crypto assets as defined under the FAIS Act. In other words, advice, intermediary, and investment management services.
This authorisation does not include the recognition of crypto assets as legal tender or “cryptocurrency”.
“Any media reports implying otherwise are therefore incorrect, as the South African Reserve Bank does not currently recognise crypto assets as currency,” the FSCA stated.
The full list of institutions licensed as CASPs can be viewed here.
