Crypto is now classified as a financial product in South Africa
The Financial Sector Conduct Authority (FSCA) has taken the first step toward regulating the cryptocurrency industry in South Africa by declaring crypto assets to be financial products under the Financial Advisory and Intermediary Services Act (FAIS).
Here’s what it means for you.
A positive step for customer safety
From 1 June 2023, Luno and other cryptocurrency platforms will have to obtain a license in South Africa to provide their services to the public. It’s business as normal while we apply for the license – your ability to buy, sell, store and explore cryptocurrency will not be impacted during this time.
This is a positive step for both the cryptocurrency industry and South Africans. We fully support this decision as it helps to protect consumers and ensures greater trust in the industry.
Luno has obtained similar licenses and registrations in a number of countries around the world (for more information, see here) and we are well placed to get this license.
Marius Reitz, Luno’s General Manager for Africa explains:
“The licensing requirements that will flow from this classification will drive high standards in the industry, particularly in relation to consumer protection, with potential investors easily able to identify those providers that satisfy regulatory requirements.
“Luno is delighted to see the development of the regulatory framework in South Africa progressing, and we look forward to further progress in the near future.”
Luno’s views on regulation
In our view, regulation is important and necessary for the responsible development of the industry. All new disruptive technology encounters regulation on the path to mass adoption, and in many cases, regulation is actually an important driving force for its success.
In the crypto space, it’s important for many reasons, but the most important one is arguably customer protection.
Regulations help protect customer funds by ensuring that service providers like Luno, and their systems and processes, are carefully scrutinised against objective standards by regulators.
We’ve always maintained close relationships with regulators. Effective regulation requires a collaborative and phased approach, with regulators acknowledging the benefits of learning and working alongside crypto platforms, as seen with the FSCA.
Regulation is inevitable. It’s also necessary. We believe that regulation will raise the bar in the cryptocurrency space and, in our experience, is also what customers want.