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Luno and Zignaly become first to receive crypto licenses in South Africa.

by Ndianabasi Tom

To bring crypto into the scope of regulated financial activities in South Africa, the Financial Sector Conduct Authority (FSCA) has kickstarted the issuance of licenses to qualified crypto firms. The positive development comes about eight months after legislation was passed to regulate crypto operations in the country.  

Luno receives Financial Services Provider license in South Africa. 

Among the first batch of crypto companies to receive regulatory approval in South Africa is Luno, a leading exchange platform founded in 2013. The London-headquartered company took to X (Twitter) on Thursday to share the update, marking a huge milestone for the firm and showcasing their years of hard work. 

Luno was issued the Financial Services Provider license by the FSCA on 11 April 2024 under South Africa’s Financial Advisory and Intermediary Services Act, 2002 (FAIS). According to the exchange platform, it is the first dedicated Crypto Asset Service Provider in South Africa to be awarded this license. It bears noting that Luno PTY LTD is now on FSCA’s list of regulated entities.

Reacting to the positive development, Luno’s country manager for South Africa Christo de Wit, said in a LinkedIn statement: “This is a culmination of years of hard work and dedication, with a clear mandate on doing things right. We’ve built our business focused on compliance, security and safety and look forward to continuing on this journey. This is a positive step for both the cryptocurrency industry and South Africans.” 

Read also: What are the top 5 centralized crypto exchanges you should know?

FSCA awards Zignaly Category 2 license

Founded in 2018 by Bart Bordallo, David Rodríguez and Abdul Gadit, Zignaly is a social investment platform that connects fund managers with investors worldwide. On 11 April 2024, the Singapore-based company received the Category 2 – Discretionary Financial Services Provider (FSP) license from the FSCA, South Africa’s apex financial market conduct regulator. 

Held by several leading asset managers, including BlackRock and Vanguard, the full asset management license is among the most advanced digital asset regulation regimes in G20 countries. With this license, Zignaly is now authorized to make investment decisions on behalf of investors and may also act as a custodian of funds for its clients. 

Touting itself as the world’s first licensed AI-driven social investment platform, Zignaly said: “This achievement is the culmination of 6 years of building our platform to meet stringent regulatory requirements to allow us to undertake discretionary Fund Management and custody of Funds on behalf of our users.” According to the team, the Category 2 license will enable them to hop into the DeFi space and launch more innovative products. 

Read also: Major use cases of cryptocurrencies in Africa

More than 300 cryptoasset service providers seek approval in South Africa

As crypto adoption continues to grow in the African region, South Africa remains keen on regulating the operations of cryptoasset service providers within its territory. Thus, the FSCA told exchanges seeking to operate in the country to apply for permits in June 2023. 

Exchanges had until November 2023 to apply for licenses or risk being fined or imprisoned according to a Bloomberg report. In particular, the FSCA promised hefty fines of up to $510,000 to companies who failed to apply in the designated period. 

To this end, over 300 crypto firms have sought regulatory approval from South Africa’s FSCA.  Reports say that the regulator plans to license about 60 cryptocurrency platforms in the short term, with Luno and Zignaly being among the first recipients. 

Related: The Draft Declaration of Crypto Assets as Financial Products in South Africa and How It Compares with SEC Nigeria’s Classification and Treatment of Digital Assets

Credit: Ndianabasi Tom  A crypto journalist and content writer who has been talking about cryptocurrency and blockchain technology since 2018, Ndianabasi is a Writer at Crypto Asset Buyer (CAB).