The South African Treasury has said it expects the proposals to include crypto asset service providers as accountable institutions within the Financial Intelligence Centre (FIC) Act to be finalized this year. The move to regulate crypto service providers comes as South Africa is attempting to address the “significant weaknesses in the country’s anti‐money‐laundering and counter-financing of terrorism systems” that were identified by the Financial Action Task Force (FATF).
South Africa to soon finalize crypto regulations.
In its latest budget review document, the South African Treasury explained that the proposed amendments, which have been open for public input since June 2021, will see the FIC Act become aligned with the standards set forth by the FATF. “This change would address concerns around money laundering and terror risk financing through crypto-assets and align the act to the standards set by the FATF for virtual assets and related service providers,” the Treasury said in its budget review document. The Treasury’s latest remarks on cryptocurrencies come several months after the Intergovernmental Fintech Working Group (IFWG) published a position paper that called for the crypto market regulation.
The Treasury expects to see crypto assets being declared financial products.
The Treasury also revealed in the budget review document that it expects to see cryptocurrencies being declared financial products under the Financial Advisory and Intermediary Services Act (FAIS). This declaration, according to the Treasury, is aimed at protecting consumers. The document noted, “according to this declaration, any person providing advice or intermediary services related to crypto-assets must be recognized as a financial services provider under the act and must comply with the act’s requirements. This will include crypto-asset exchanges and platforms and brokers and advisors. This work is expected to be finalized in 2022.