Crypto Assets in South Africa Would Be Considered Financial Products Under Regulator Proposal

Sunday 22 November 2020, 5:00 AM AEST - 3 days ago

Cryptocurrency assets would be treated like financial products under South Africas Financial Advisory and Intermediary Services (FAIS) Act, under a draft declaration by a financial regulator.

The Declaration would have the effect that any person furnishing advice or rendering intermediary services in relation to crypto assets must be authorised under the FAIS Act as a financial services provider, and must comply with the requirements of the FAIS Act, wrote the Financial Sector Conduct Authority (FSCA), which is seeking comment on the proposal. This will include crypto asset exchanges and platforms, as well as brokers and advisors.

How each country treats cryptocurrency has major implications for which regulators oversee crypto activities and what licenses companies have to pursue. In January 2019, the countrys central bank published a paper saying that regulatory action on crypto assets needed to be prioritized to protect consumers.

The regulator also said that the declaration could improve disclosures about the risks of crypto assets to customers looking to invest. The draft doesnt impact the status of crypto assets in the context of other laws such as exchange control regulations, requirements under the Pension Fund Act and Collective Investment Schemes Act and so forth, nor does it attempt to regulate, [legitimize] or give credence to crypto assets, the regulator wrote.

The draft will serve as an interim step between more developments from the countrys Crypto Assets Regulatory Working Group which will impact future crypto policies in South Africa.

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