Luno, a cryptocurrency exchange, has become one of the inaugural recipients of a license from South Africa’s Financial Services Conduct Authority (FSCA), enabling the exchange to function as a financial services provider within the nation.
In its announcement, Luno disclosed that it has been granted a financial services provider license following the FSCA’s classification of crypto assets as financial products under the Financial Advisory and Intermediary Services Act of 2002 (FAIS).
Christo de Wit, Luno’s country manager for South Africa, expressed enthusiasm regarding this milestone, stating, “As a pioneering entity with over a decade of involvement in the crypto market, Luno is excited to be the premier licensed crypto asset service provider in the country.”
He added, “This development represents a significant advancement for both the cryptocurrency sector and the South African populace. Our commitment to compliance, safety, and security for our clientele has been instrumental in our growth trajectory and will remain paramount as we broaden our spectrum to introduce a plethora of features and products for financial institutions.”
Luno is the first dedicated Crypto Asset Service Provider in South Africa to be awarded its Financial Services Provider licence 🎉
Read the full story here:https://t.co/D9rhnRVd5S pic.twitter.com/xj2qh7Kxfo
— Luno (@LunoGlobal) April 11, 2024
Established in 2013, Luno is a cryptocurrency exchange that offers a dedicated cryptocurrency investment application. Its services are accessible in over 40 countries spanning Europe, Africa, Asia, and Australia.
FSCA Set to Grant Authorization to 59 Digital Asset Companies
In March, reports surfaced indicating that the Financial Services Conduct Authority (FSCA) is in the process of granting operating licenses to a total of 59 cryptocurrency exchanges. This development comes in response to a substantial number of South African crypto providers, numbering over 300, who have sought regulatory approval. However, only 59 of these providers have thus far received the green light from the FSCA to operate legally within the country.
Under South African law, digital-asset exchanges are required to obtain permits in order to conduct business operations. This regulatory framework aims to safeguard financial consumers from potential risks associated with cryptocurrency transactions, as well as to combat money laundering and the financing of terrorism.
The decision to regulate cryptocurrency assets as financial products was made by the FSCA in 2022, signaling the need for comprehensive oversight in the burgeoning crypto market. With the aim of protecting consumers and ensuring the integrity of the financial system, the FSCA set a deadline of November 30 for exchanges to submit license applications. Failure to comply with this requirement would result in potential enforcement actions against non-compliant firms.
The Regulatory Framework Established by FSCA for Oversight of Crypto Assets
In 2021, the Financial Services Conduct Authority (FSCA) issued a paper outlining its approach to bringing crypto assets under regulatory oversight in South Africa. This process was described as being conducted in a “phased and structured manner.”
The FSCA elaborated on the rationale behind this regulatory initiative, citing the surge in retail interest in crypto assets. Alongside this heightened interest, there has been a noticeable uptick in instances of consumer abuse, fraud, and market misconduct, both domestically and globally. Recent reports of fraudulent schemes highlighted in the media have underscored the urgency for South African authorities, primarily through the FSCA, to take decisive action against the rising trend of market abuse facilitated by crypto assets.
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