South Africa regulates crypto assets primarily through Financial Services Provider (FSP)licensing for Crypto Assets Services Providers (CASPs) under the Financial Advisory and Intermediary Services (FAIS) Act, alongside anti-money laundering and tax compliance frameworks.
Regulatory Framework & Authorities
- FSCA Oversight: The Financial Sector Conduct Authority (FSCA) classifies crypto assets as financial products, requiring CASPs to hold a Category I or II Financial Services Provider license.
- FIC Obligations: The Financial Intelligence Centre designates CASPs as accountable institutions under the FICA, mandating Know-Your-Customer (KYC) protocols and the FAFT Travel Rule to transfers.
- SARS & CARF: The South African Revenue Services (SARS) treats crypto as intangible assets, enforcing automated annual-data collection via the Crypto-Asset Reporting Framework (CARF).
- Legal Tender Status: Crypto assets are legal tender to own and trade in South Africa, but they are not recognized as official tender by the South African Reserve Bank.
Licensing Requirements & Process
- Application Mandate: Platforms providing advice, intermediary, or portfolio management services must secure an FSCA license.
- Fit and Proper: Key individuals and representatives must meet operational ability, personal character, and financial soundness criteria.
- AML Compliance: Accountable institutions must register free on the FIC goAML system and maintain comprehensive risk management policies.
Emerging Developments & Risks
- Exchange Controls: Recent judicial rulings (such as Mangundhla v SARB) confirm that crypto movements can attract exchange control scrutiny, and tighter cross-border manuals are under active review.
- Total Capital Loss: Direct crypto investments carry a high risk of total loss due to market volatility and lack of certain bank backing.
How long would establishing a crypto asset business/obtaining a license take?
Accountable institutions (including crypto assets service providers) are required to register with the Financial Intelligence Centre (FIC) within 90 days (ninety) after the business has begun operating.
The Financial Sector Conduct Authority (FSCA) may raise various questions and or queries in response to a license application and, as such, this process may take up to 6 (six) months to be finalized.
What would be the approximate overall cost of obtaining a license?
As of October 2024, the FSCA increased license application fees and matters incidental thereto (which have remained unchanged since 2018) by an amount of 6% (six percent). The license application fees now are as follows:
- Category I FSP – ZAR2 697
- Category II (Discretionary) FSP – ZAR16 313
- Category III (Hedge Fund FSP) – ZAR16 313
- Category IV (Assistance FSP) – ZAR2 697
Should the applicant already be licensed under any other categories or apply for more than one category then a discount of 10% will be applicable (except for Category III which will be discounted at 20%).
What is the profitability [%] of success in obtaining a license?
The prospects of success in obtaining a FSP license will depend on the nature of the applicant’s proposed business and whether the applicant, and its key individuals, satisfy the relevant fit and proper requirements required in terms of section 6A of FAIS, including (but not limited to) personal character, competence, operational abilities and financial soundness. As of 31 March 2026, the FSCA has received 533 CASP license applications and approved a total of 310 applications. The FSCA declined 17 applications, and 124 applications were voluntarily withdrawn following engagements with the FSCA.
The reasons given by the FSCA for declining CASP license applications include failure to meet such fit and proper requirements, including operational ability and competency requirements.
Given that the inclusion of CASPs as “accountable institutions” makes registration mandatory with the Financial Intelligence Centre (FIC), rejection is unlikely unless incorrect or insufficient information is provided during the registration process.
What other limitations are there in this jurisdiction when looking to set up a crypto assets business? E.g. Compliance requirements and physical presence
As accountable institutions, CASPs are required to be registered and to report, among other things, suspicious and unusual transactions (section 29) and cash transactions in excess of ZAR 49,999.99 (section 28) in terms of the reporting requirements set out in Part 3 (Reporting duties and access to information) of FICA.
FSPs must comply with the relevant qualifications’ requirements under FAIS, including the applicable “fit and proper” requirements for the relevant category of FSP. These requirements include meeting the necessary standards of honesty, and integrity, competence, operational ability, financial soundness, and continuous professional development.
Should a company be established in South Africa to provide services as a CASP, then the provisions of the Companies Act, 2008 (“Companies Act”) will apply and must be complied with for the establishment or incorporation of the South African company and its operations on a continuing basis. Furthermore, any foreign company carrying on business within South Africa (including the provisions of services as a CASP) is required to register as an “external company” in terms of the Companies Act within 20 (twenty) business days after it first begins to conduct business within South Africa and must maintain at least one office in South Africa and register the address of such office (or its principal office) with the Companies and Intellectual Property Commission (CIPC).
The South African Advertising Regulatory Board has amended the Code of Advertising Practice to require that all advertisements for crypto assets must include a warning that capital loss may occur; e.g. “Investing in crypto assets may result in the loss of capital”.
On 13 December 2024, the Financial Intelligence Centre issued a directive, namely Directive 9, for the implementation of the travel rule for accountable institutions engaging in crypto-assets transfers, in accordance with the Financial Action Task Force (“FATF”) recommendations (“Travel Rule”), which directive came into force on 30 April 2025. The Travel Rule gives effect to the FAFT recommendations regarding wire transfers and/or electronic fund transfers in the context of crypto assets. It applies to the transfer and/or receipt of crypto assets by CASPs for or on behalf of their clients. It sets out requirements for specific information that must be obtained regarding such transactions and the related records that must be kept by CASPs in this regard. The specific information required includes information about both the sender (originator) and the receiver (beneficiary) of a crypto-asset, and which information is required to be transmitted securely by the ordering CASP to the receiving CASP. The Travel Rule applies to both domestic and cross-border crypto assets transfers, and its aim, in particular, is to prevent crypto-assets from being used to facilitate and/or conceal criminal activity, to enhance detection of suspicious activity, to combat criminal activity, and network and to ensure a safe and secure crypto ecosystem.
The Travel Rule applies to all crypto-asset transfers, whether domestic or cross-border and regardless of the transaction amount. Verification obligations may, however, vary depending on the transaction value/amount. For instance:
- Transaction under ZAR5 000 – basic information would need to be collected, but verification would only be required should there be a suspicion of money laundering or terrorism funding.
- Transactions with a value of ZAR5 000 or more – full verification would be mandatory, in accordance with the FICA due diligence requirements.
- Inbound transfers from high-risk jurisdiction – CASPs who are recipient of crypto-assets in a transaction initiated in a high-risk jurisdiction are required to perform a full verification regardless of whether the transaction value is less than ZAR5 000 or not.
The Travel Rule applies to CASPs and financial service providers (as defined in the FSCA).
Crypto-assets are subject to the general principles of South African tax law. Consideration will be given to the specific circumstances of each transaction.
The Crypto-Asset Reporting Framework (“CARF”) requires CASPSs (with a presence in South Africa or who provide services to South African tax residents) to submit annual reports to the South African Revenue Services (“SARS”) including customer identification details, the number of wallets linked to the customer and the transaction data specified crypto-assets categories.
Reportable transactions under the CARF include exchanges between crypto assets, purchases and disposals of crypto asset wallet transfers and retail payment transactions exceeding EUR50 000 or USD50 000. The first reporting period for CASPs is 1 March 2026 to 28 February 2027, with submissions due to SARS by 31 March 2027.
The draft Capital Flow Management Regulations, as published by the National Treasury of South Africa for public comment on 17 April 2026 (“Regulations”), defines crypto assets as “capital” for purposes of the Regulations. The Regulations, once implemented and subject to any amendments following the period of public consultation, are expected to settle the debate in South Africa as to the treatment of crypto assets for exchange control purposes and bring crypto assets within the ambit of the South African exchange control regulatory framework, including any cross-border purchases, sales, or transfers of crypto assets. Consideration will need to be given to the final Capital Flow Management Regulations and the specific circumstances of each transaction.
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