South African crypto-currency exchanges believe the smaller players will be negatively impacted by the licence requirements recently imposed by the country’s financial regulators. governanceriskandcompliance fsca altcon Ovex davidporter
While local players have largely welcomed the move, saying it will legitimise the industry and help in weeding out the bad actors, they fear smaller crypto asset service providers will not be able to comply with the new requirements.
“Lastly, we believe licensing will improve investor protection and marginalise bad actors in the sector through ensuring adequate financial resources and improved financial reporting,” Porter says., points out the CASP licensing will not impact the firm’s day-to-day operations. He says Ovex and its related companies have been operating as regulated entities within financial services, credit, foreign exchange and related environments for many years.
According to Ehsani, since the firm’s establishment in 2018, every customer at VALR has had to verify their identity before being allowed to do a single rand of trading. “One would be hard-pressed to find a firm that wholeheartedly agrees with all the local regulatory requirements. South Africa’s exchange control regulations, drafted before the invention of the computer, are one example where we feel the decentralised and borderless nature of the crypto industry is being particularly hampered.
“The need to register and/or license crypto asset service providers has been in the pipeline for some time and we are excited to see this come to fruition. As the technology and services in the crypto industry advances, there will be a need to ensure our regulatory frameworks in SA remain appropriate and ensure the public interests are safeguarded, while ensuring innovation flourishes on our shores.
He notes Luno is in the fortunate position that it operates in a number of markets globally, some of which already have regulatory regimes in place. “Compliance, therefore, will not require a change in terms of how we operate.”
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