South Africa declares crypto assets as financial products
The Financial Sector Conduct Authority (FSCA), South Africa’s financial regulator has declared crypto assets as ‘financial products’ via a notice published on Oct.19 in the government’s gazette.
Signed into effect by FSCA commissioner, Unathi Kamlana, the declaration became effective upon publication.
The new definition for crypto assets is an update to the current Financial Advisory and Intermediary Service Act, 2022.
The move brings crypto assets under the purview of financial regulations and enables traditional financial services to provide crypto services in the country.
The notice defines crypto assets as a digital representation of value not issued by a central bank but that can be traded, transferred or stored electronically for the purposes of payment, investment and other forms of utility.
Further, it applies cryptographic techniques and uses distributed ledger technology.
Crypto asset services providers are also henceforth subject to financial regulation. This includes requiring individuals providing crypto asset services to undergo evaluation by the gazette and the Advisory Committee to prove it is a trusted corporate body and attest to their good character during the application process of becoming a financial services provider.
The financial services provider will obtain a license, which may be suspended or revoked according to the FSCA’s terms.They must also conduct audits and maintain full and proper accounting records annually on the cash flow information, income statements, financial statements, money, and assets held on behalf of clients, among other things.