The head of enforcement at the South African financial sector watchdog stated on Jan. 24 that he expects the agency to decide on the fate of 50 cryptocurrency license applicants in the coming weeks. The watchdog reported that 20 of the more than 100 organizations that requested a license have now withdrawn their applications.
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The Cost of Getting a License South African
An official with the Financial Sector Conduct Authority (FSCA), South Africa’s financial industry watchdog, stated on January 24 that the body intends to decide the fate of approximately 50 crypto businesses’ licensing applications in the coming weeks. The FSCA’s head of enforcement, Gerhard van Deventer, disclosed that 20 of the more than 90 applicants have since withdrawn.
The South African watchdog received 93 applications just days before the November 30 deadline, according to a report by Bitcoin.com News in late 2023. This total, which eventually increased to 105, included both current FSP license holders and new applications.
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At the time, the FSCA’s compliance chief, Diketso Mashigo, stated that some applicants had decided not to pursue the license. Some eventually chose to operate outside the South African market.
Deventer, who made the statements during a podcast, said that some of the applicants may have chosen to withdraw due to the high expense of getting a financial service provider (FSP) license.
Applicants fail to meet key requirements.
However, the FSCA’s head of enforcement claimed that some of the applicants who withdrew did so after becoming aware of the burden of obtaining the license. Deventer contended that many of those applicants had no realistic chance of meeting one critical condition.
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“Applicants became stuck on the requirement for an appropriate key individual because such an individual would need to have very specific and relevant experience, qualifications, and skills.” And there isn’t much of it around, given that cryptocurrency hasn’t been around for very long,” the FSCA’s Head of Enforcement said.
Some of the applicants who found themselves in this predicament stated that they would only reapply if a suitable candidate was identified, Deventer noted.
When questioned about the FSCA’s upcoming regulatory changes, Deventer responded that the changes were necessary to combat scammers who purposefully operate outside of its regulatory purview. According to Deventer, once the new legislation takes effect, it will be impossible for such businesses to circumvent regulation of their operations.
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