South Africa’s financial regulator has taken a significant step towards regulating the cryptocurrency industry by starting to issue licenses to crypto firms. Among the first batch of companies to receive approvals are exchange platform Luno and decentralized social investing marketplace Zignaly.
Luno announced that it had been approved as a financial service provider under the country’s Financial Advisory and Intermediary Services Act, 2002 (FAIS). The company, now listed as Luno PTY LTD, appears on the Financial Sector Conduct Authority’s (FSCA) registry of authorized entities.
Zignaly also shared that it had received a Category 2 – Discretionary Financial Service Provider (FSP) license and is now listed in the FSCA registry as Merritt Administrators PTY LTD.
The South African regulator began accepting licensing applications from crypto firms in June 2023 after legislation was passed to bring crypto activities under regulation. The FSCA has warned of hefty fines for companies operating without the necessary approvals.
Christo de Wit, Luno’s country manager for South Africa, expressed optimism about the development, stating, “This is a positive step for both the cryptocurrency industry and South Africans. Compliance, safety, and security for our customers have driven our growth since the beginning and will continue to be priorities as we expand our offering.”
Zignaly’s Category 2 license allows the company to conduct discretionary fund management and act as a custodian of funds for its clients. The company described the license as comparable to what traditional financial giants like Blackrock or Vanguard have.
The news of Luno and Zignaly receiving licenses marks a significant milestone in the regulation of the cryptocurrency industry in South Africa. The move is expected to enhance trust and security for investors and customers in the rapidly growing crypto market.