FSCA approves 300 crypto service providers, intensifies action against unlicensed operators

South Africa’s Financial Sector Conduct Authority (FSCA) has approved 300 crypto asset service provider (CASP) licences since the formal licensing regime came into effect in June 2023, while stepping up enforcement against firms operating outside the regulatory framework.

Crypto assets are defined as a digital representation of value that is not issued by a central bank but is capable of being traded, transferred or stored electronically by natural and legal persons for the purpose of payment, investment and other forms of utility, applies cryptographic techniques and uses distributed ledger technology.

In an update issued on Monday, the regulator said it had received 512 licence applications as at 12 December 2025. Of these, 14 applications were declined and 121 were voluntarily withdrawn after engagements with the FSCA raised concerns about applicants’ business or operating models. The remaining applications are still under consideration.

The FSCA said applications were mainly declined due to failure to meet the “fit and proper” requirements under the Financial Advisory and Intermediary Services (FAIS) Act, particularly shortcomings in operational capacity and a lack of demonstrated requisite knowledge and practical experience in crypto assets.

Applicants whose licences were declined or withdrawn may reapply in future, provided that they demonstrate full and proper compliance with the applicable licensing requirements. However, the FSCA warned that they may not conduct any CASP-related activities in the interim.

"Any institution or person found to be conducting CASP-related activities without a licence will be subject to enforcement action by the FSCA," it said.

The regulator has also intensified enforcement action against unlicensed operators. To date, it has initiated 81 investigations into entities suspected of providing crypto-related services without authorisation. While 25 cases were closed after firms ceased trading or were found to be dormant, 56 investigations remain ongoing.

Beyond licensing, the FSCA has begun supervising CASPs for compliance with anti-money laundering, counter-terrorism financing and counter-proliferation financing requirements under the Financial Intelligence Centre Act.

"A further 30 supervisory inspections were planned between April 2025 to March 2026, 21 of which have already been completed," said the FSCA.

"Most of these inspections cover the full range of compliance requirements under the FIC Act, and are intended to provide an initialassessment of the ability of newly licensed CASPs to comply with their regulatoryobligations in line with their inherent AML/CFT/CFP risk exposures."

In August, the FSCA also established the Crypto Asset Supervisory Engagement Forum to improve information sharing, risk awareness and regulatory coordination across the sector.

The forum was aimed at helping develop a deeper understanding of the risks, trends and challenges facing CASPs, allow for regular information sharing, education and outreach with the sector to improve understanding of risks and supervisory expectations, as well as enhance compliance of CASPs with various regulatory obligations, and facilitate coordination and alignment between different regulatory agencies on industry expectations, risk management, regulatory developments and supervisory approaches impacting CASPs.

The authority reminded the public that crypto assets are not recognised as legal tender in South Africa and that its regulatory mandate is limited to financial services linked to crypto assets, such as advice, intermediary services and investment management. The South African Reserve Bank does not recognise crypto assets as currency

BUSINESS REPORT