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Mandate registration is coming! South Africa wants to regulate crypto

Jan 22, 2019

A regulatory group of experts in South Africa, comprised of South Africa’s Financial Intelligence Centre (FIC), Financial Sector Conduct Authority (FSCA), National Treasury (NT), the South African Revenue Service (SARS) and the South African Reserve Bank (SARB), released a clarification paper on crypto assets this week.

The SARB is very careful when it comes to comprehensive regulations for the crypto sector, as it presumes that any omission may harm its reputation. Currently the bank is considering possible work options that would allow for a sort of compromise between doing nothing and implementing a restriction on the sector, which was earlier reffered to as “limited regulation”.

SARB declared:

"At this proposed level, an official body places specific requirement on providers of certain services in respect of crypto assets, without setting predefined conditions for formal authorization to provide crypto assets-related products or services".

The SARB is taking into account numerous aspects to respectively regulate crypto sector including the announcement of a mandatory registration requirements for all cryptocurrency exchanges and wallet platforms operation within the country.

The SARB also clarified that a step-by-step approach, starting with the registration phase, would lead to formal authorization and designation as a registered/licensed provider for crypto asset services operating in South Africa at a later stage. But even despite that, the bank clarified that it does not regard digital assets as legal instruments. The complete registration process shall be finished by the end of Q1 of 2019. Moreover, the cryptocurrency service providers would also have to abide new AML&CFT requirement with regards to suspicious transactions, such as cash transactions of R25,000 and more.

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