02 Dec 2022
The Government of South Africa will soon add Crypto Entities to its “List of Accountable Institutions”
Starting on December 19th, crypto entities (or businesses whose activities include exchanging or transferring crypto assets) will be required to register as “accountable institutions” by the South African government.
To this list will be added companies that facilitate the exchange of one cryptocurrency for another, as well as those that enable the transfer of cryptocurrency “from one crypto asset address or account to another.”
Revisions to the Financial Intelligence Centre Act
The South African government has recently announced that those running crypto-related businesses will be brought under the regulatory umbrella. A Government Notice published on November 29 states that crypto businesses were added to the list after schedules 1, 2, and 3 of the Financial Intelligence Centre Act, 2001, were revised to include such activities.
The South African minister of finance, Enoch Godongwana, made the amendments to the Act, which will take effect on December 19.
Godongwana specifies in the notice what sorts of crypto-related activities and operations will be subject to oversight by the so-called accountable institutions.
People “exchanging a crypto asset for a fiat currency or vice versa” are also planned for inclusion.
To this list will be added companies that facilitate the exchange of one cryptocurrency for another, as well as those that enable the transfer of cryptocurrency “from one crypto asset address or account to another.”
The notice promised that the list would be updated to include individuals and organizations that provide custody services for digital assets and issue such assets.
No Definition of Crypto Assets in Financial Markets Act
After less than two months since the Financial Sector Conduct Authority designated crypto assets as a financial product, South Africa has announced its intention to add crypto entities to a list that includes attorneys, investment schemes, and money transfer businesses.
This label means that crypto asset service providers like exchanges now must apply for a license to operate legally in the sector. In addition, the South African finance minister defines what, from the government's perspective, is a cryptocurrency asset in the same notice.
“Where crypto asset means a digital representation of perceived value that can be traded or transferred electronically within a community of users of the internet who consider it as a medium of exchange, unit of account or store of value and use it for payment or investment purposes, but does not include a digital representation of a fiat currency or a security as defined in the Financial Markets Act, 2012...”
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