FSCA updates on licensing and supervision of crypto asset service providers

The Financial Sector Conduct Authority (FSCA) says it has been actively processing applications and monitoring compliance to ensure that the crypto asset sector operates within the boundaries of South African financial regulation.

The FSCA says the licensing process for crypto asset service providers (CASPs) under the Financial Advisory and Intermediary Services (FAIS) Act, No. 37 of 2002, began on June 1, 2023.

"As of December 12, 2025, the FSCA had received 512 licence applications. Of these, 300 have been approved, 14 declined, and 121 voluntarily withdrawn after discussions with the regulator. The remainder are still under review," it says.

According to the regulator, applications have been declined primarily due to shortcomings in operational ability and competency. The FSCA highlighted that some applicants failed to provide clear and comprehensive business plans, while others lacked the necessary expertise in crypto assets.

“Institutions that have voluntarily withdrawn their applications or that have had their applications declined by the FSCA are free to reapply in the future, on condition that they demonstrate full and proper compliance with the applicable licensing requirements. In the meantime, they may not undertake any CASP-related activities as defined under the FAIS Act,” the regulator says.

The FSCA says it has also intensified enforcement against unlicensed operators. “Any institution or person found to be conducting CASP-related activities without a licence will be subject to enforcement action by the FSCA,” the authority warned.

The regulator says to date, 81 investigations have been launched into potential unlicensed CASPs. Twenty-five of these cases were closed without enforcement action, largely because the entities had ceased trading or were dormant, while 56 remain under investigation.

The FSCA says the supervisory activities have also expanded. Between January and March 2025, the FSCA conducted its first round of 10 supervisory inspections, focusing on governance arrangements, risk management programmes, and business risk assessments. It says a further 30 inspections were planned between April 2025 and March 2026, with 21 already completed. These inspections are designed to assess the ability of newly licensed CASPs to comply with anti-money laundering (AML), countering the financing of terrorism (CFT), and countering proliferation financing (CFP) obligations under the Financial Intelligence Centre Act.

According to the FSCA, in August 2025, it established the Crypto Asset Supervisory Engagement Forum (CASEF) to strengthen dialogue with the industry. The forum aims to deepen understanding of risks and trends, facilitate information sharing, and improve compliance. It also serves as a platform for coordination between regulatory agencies.

The FSCA reminded the industry of the expiry of the regulatory exam exemption. Initially granted in May 2023, the exemption allowed CASPs and their key individuals to delay regulatory examinations for 18 months. It expired in November 2024 but was extended until 30 June 2025. “No further extensions would be granted,” the FSCA confirmed, adding that failure to comply could result in suspension or withdrawal of licences.

The regulator also clarified the legal status of crypto assets in South Africa. “The public is reminded that the FSCA’s licensing powers are limited to the licensing and supervision of CASPs only insofar as they render financial services related to crypto assets as defined under the FAIS Act. This excludes the recognition of crypto assets as a legal form of tender or ‘cryptocurrency’. The South African Reserve Bank does not currently recognise crypto assets as currency,” the statement read.

It says crypto assets are defined as digital representations of value that are not issued by a central bank but can be traded, transferred, or stored electronically for payment, investment, or utility purposes. They rely on cryptographic techniques and distributed ledger technology.

The FSCA says the public can visit its website for the full list of licensed CASPs. This list also identifies providers that initially obtained licences but later removed crypto assets from their offerings, as well as entities whose licences have lapsed or been withdrawn.

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