VALR, a cryptocurrency exchange based in South Africa, has recently obtained fresh Crypto Asset Service Provider (CASP) permits from the Financial Sector Conduct Authority (FSCA). These licenses were granted due to recent regulations set by the FSCA that apply to businesses in this sector.
VALR, having obtained $55 million in equity investment from investors like Pantera Capital and Coinbase Ventures, has been granted Category I and II CASP licenses by the Financial Sector Conduct Authority (FSCA) in South Africa. This puts VALR among the first cryptocurrency firms in the country to hold these licenses.
In simple terms, Farzam Ehsani, the co-founder and CEO of VALR, shared with CryptoMoon that obtaining a CASP license from the Financial Sector Conduct Authority (FSCA) marked an important achievement for their cryptocurrency exchange.
The business is collaborating closely with South African regulatory authorities to create and enforce regulations that promote the expansion of the cryptocurrency and blockchain industry, while safeguarding investors.
“Our licensure reflects our firm commitment to adhering to regulations, ensuring security, and creating a dependable cryptocurrency platform. We’re thrilled about this regulatory achievement in South Africa and acknowledge the efforts of the regulators in taking this significant action for the country,” Ehsani expressed.
In June 2023, the Financial Sector Conduct Authority (FSCA) initiated the process for crypto asset service providers in South Africa to submit license applications. This deadline fell in November 2023, providing a six-month window for companies to comply with local regulations. Upon submission, these entities would come under the jurisdiction of the Financial Advisory and Intermediary Services Act.
Ehsani further clarified the distinction between the two types of permits. A CAT I license, which is the basic financial services permit needed by a Certified Financial Advisor and Providers of Financial Services (CASPs) in South Africa, allows them to offer advice or swap services to their clients.
A CAT II license, also known as a discretionary mandate license, grants customers the ability to authorize VALR and other licensed financial services providers to make decisions on their behalf for portfolio structuring. This means VALR can delve into diverse investment areas like bundled offerings. (Ehsani’s explanation paraphrased)
This legislation intends to shield both customers and investors, while granting regulatory bodies the power to impose penalties for non-compliance. In a first for Africa, South Africa initiated the licensing of cryptocurrency exchanges under regulatory frameworks that have been in progress since 2021.
Previously, it was announced that the Financial Sector Conduct Authority (FSCA) granted approval to 59 cryptocurrency platform license applications in March 2024. At the point of the initial Reuters article, there were 262 crypto exchange licensing applications being processed by the FSCA out of a total of 355 applicants.
Starting in January 2023, South Africa’s Advertising Regulatory Board made adjustments to their guidelines to handle the growing interest in cryptocurrency investments. These modifications aimed to shield consumers from misleading advertisements.
In South Africa, a fresh rule added to Section III of the advertising regulations now mandates that businesses and individuals offering cryptocurrency goods or services adhere to specific advertising guidelines.
In plain terms: Ads for investments, including those for cryptocurrencies, should explicitly and easily communicate that there’s a risk of losing money since the value can fluctuate and decrease as well as increase.
when promoting specific goods or services, it is essential that the advertisements are clear and comprehensible for their target demographic. Adverts should convey accurate information about the product or service’s advantages, disadvantages, features, benefits, and risks. Social media influencers are included in this regulation as well.
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2024-04-15 17:07